Music Tax Scheme goes wrong, leaves members with large tax bill
It is thought that among 1,000 people have been affected by this tax tribunal decision including Gary Barlow and Mark Owen of the pop band Take That.
The tax losses which were generated by the scheme were allowed to be offset against tax, reducing various individual tax bills. In total, the Icebreaker partnership generated losses of £336 million.
HM Revenue & Customs have confirmed that following Judge Bishopp’s decision, those involved in the scheme would now receive letters outlining how much tax they have to repay.
Bishopp said the partnerships were carrying on the trade of the exploitation of intellectual property rights, with investments in obscure pop groups, publishing and also the sale of ‘personal alarms’, but that their main aim was to secure tax relief for members. He found that Icebreaker members inflated investments through ‘entirely circular’ loans as a means of offsetting losses against other tax bills, while none of the partnership made any profit.
The members of the scheme have until 2 July to decide whether they wish to appeal the decision and in the meantime HM Revenue & Customs will be seeking payment of the tax in the meantime.
If you are affected by this recent tax decision and are worried about the ability to make the repayment of these tax liabilities, perhaps it would be advisable to take professional advice and contact AABRS to discuss in more details. Please phone Simon Renshaw on 0208 444 3400.