Celebrities Among Hundreds Who 'Avoided Tax'
Several names from the world of showbiz have been accused of hiding their money in an aggressive tax avoidance scheme.
George Michael, Sir Michael Caine and Katie Melua all invested in the Liberty tax strategy, according to a report in The Times newspaper.
Some 1,600 people, including QCs, doctors, top businessmen, celebrities, criminals and a judge, are said to have invested in the scheme.
They are accused of trying to shelter a total of £1.2bn in Liberty, which ran between 2005 and 2009.
The scheme worked by making huge artificial "losses" offshore, which members could then use to avoid paying tax on other income.
It meant that for every £1 earned, investors could reduce the amount they paid to 7p in tax instead of 40p, while higher rate taxpayers could earn £1m each year tax free.
To do the latter, they had to pay £70,000 in fees to Mercury Tax Group, the company which ran the scheme.
According to a document leaked to The Times, Michael is said to have paid £443,000 seeking to shelter £6.2m he earned from record and tour sales.
The newspaper said the singer told the Big Issue in 1996 he would be happy paying 50% to 60% tax under a Labour government.
The singer's spokesman told the paper his "busy schedule" meant he could not answer questions at present.
Singer Melua tried to shelter £850,000. Her lawyers said it was her accountants who did so and that when she found out, she paid the money back.
Sir Michael, who is accused of sheltering £600,000, made "no comment", while four members of the Arctic Monkeys, who are each said to have sheltered between £557,000 and £1.1m, also declined to speak.
Sky's political correspondent Anushka Asthana said: "All of these celebrities are going to be targeted by a change of rule.
"HMRC is going to take this tax scheme to court next March but in the meantime the new rules mean they have to pay the money back.
"If they don't, the Government can go directly into their bank accounts and take it."
A number of other celebrities have been identified as having used tax avoidance schemes in the past including Take That star Gary Barlow, who used another scheme set up by Icebreaker Management, and Jimmy Carr, who was said to have channelled cash through Jersey-based K2.
Tax avoidance is legal although David Cameron has described it as "morally wrong".
Asthana added: "The Prime Minister stuck the boot in when The Times first outed comedian Jimmy Carr as a tax avoider.
"He was a little less willing to do so when it was Conservative-supporting Gary Barlow, who had also invested in the scheme we are talking about today."
A HMRC spokesman said it did not comment on individual cases but added: "We are always happy to help the increasing numbers who want to disentangle themselves from the increasingly fruitless practice of tax avoidance."