Here is my Katie Melua tax tea. It shows her to be stupid, disingenuous and selfish. Is that any good?
I work in finance, have done for 25 years. I’m a chartered accountant and one of my specialisms is tax. Because I work in the accountancy profession I get to read all about new developments and schemes, and other people in the profession form a view on them, which I usually get to hear about.
There is a constant supply of chancers trying to punt tax avoidance schemes. The targets are often wealthy people, but not always. Some schemes were aimed at people earning not that much: if there’s interest from the punters, somebody will serve that market, which is why you get, eg, IT contractors complaining that they will have to sell their houses in order to pay tax owed from ten years ago when they joyfully participated in schemes based around loans from fake employee benefit trusts. Any such scheme is sold with heavy caveats: any tax avoidance scheme promoter will tell you, subtly or otherwise, that participation is at your own risk.
There is a particular chancer, whom I won’t name but whom I’ve met professionally, who set up an outfit called Mercury Tax. Mercury developed a few ropy schemes. One, in particular, was called the Liberty scheme. It was based around ’investors’ (ie people who wished to avoid paying tax) buying the rights to dividends declared by a company based in the Caymans - the island of choice for tax avoiders since Jersey has inconveniently increased regulation - and through complicated machinations, treating the dividends as non-taxable. So manufacturing losses to shelter taxable income. The participants included Anne Robinson, the Arctic Monkeys, George Michael (whom we often hear about giving generously to charities...not so generous with his own taxes though), Michael Caine and Katie Melua.
Katie put almost a million quid into the scheme. Remember that anybody participating in such a scheme is given no guarantees by the scheme promoter and gets involved at their own risk.
Several years previously, Katie had announced to a number of charities, on the record of course, why bother virtue signalling in private, that she paid almost half of her income in tax, which is the correct amount of tax for somebody of her level of earnings to pay. In other words, she was paying according to the same rules as the rest of us. She attracted much praise for this, and was described as a ‘tax superhero’ by one charity. One might ask why somebody paying the correct amount of tax just like everyone else, including those earning far less than her deserved to be showered with praise, but Katie happily simpered and lapped up the approval.
So it was rather embarrassing for Katie, wasn’t it, when HMRC closed down the Liberty scheme - quite rightly, because it was utter bollocks - and Katie was exposed as one of the participants.
She first tried the disingenuous ‘but I was only following advice and I thought it was legal!’ wide-eyed shock strategy but that was cutting no ice, probably because schemes involving manufacturing tax losses in the Cayman islands aren’t something you generally wander into by accident when planning your tax affairs with strict regard to the law, so she quickly paid up and virtuously declared that she now didn’t owe HMRC anything and her tax affairs were up to date. Yes, Katie, because you got caught!
Genuinely, how stupid is she? She must have at least suspected that she was extremely likely to be hoist by her own petard if the tax scheme - which she will 100% have been warned was chancy and involved sailing rather close to the wind - didn’t work and was closed down, because she’d made a big deal out of being a so-called ‘tax superhero’, but she was greedy enough to have a go anyway. Then pathetic enough to try to blame her wicked advisers, whom she implied made her do it. Poor, innocent Katie, surrounded by dastardly advisers! It’s enough to make you weep, innit?
She was undoubtedly too stupid to put two and two together and work out that the tax paid by wealthier people is what pays for services used by the young people buying her records: you know, health, education, housing, social services, that sort of thing. The type of services she herself benefited from when her family moved to the UK from Georgia when she was eight. The taxes that paid her father’s salary, when he got a job as a heart surgeon in the NHS in Belfast, for example.
But never mind that. Dear old Katie is sitting on her £18m (according to Wikipedia) fortune and hoping that we’ll forget all about the inconvenient hypocrisy and lying.