It is believed that up to £325 million in unpaid tax could be recovered from members of the ‘Liberty’ scheme, which was promoted by Mercury Tax Group between 2005 and 2009.
And Her Majesty’s Revenue and Customs has now warned people to steer clear of tax-avoidance schemes such as Liberty or face a ‘hefty consequence’.
Celebrities – including Gary Barlow, Michael Caine and Anne Robinson – doctors, professional athletes and judges are believed to have sheltered up to £1.2 billion in the scheme, which was based around a Jersey limited partnership called the ‘Clavis Liberty Fund 1 LP’.
The partnership aimed to create losses which members could offset against their income to reduce their tax bill.
This involved the partnership claiming to carry out trade in the UK, with each user contributing a sum to acquire rights to dividends declared by Helios, a Cayman Island-registered company.
The partnership would then claim a deduction for the cost of purchasing the dividend rights, but tried to exclude the dividends received from its trading results, creating a loss that would diminish users’ tax bills.
In its ruling, the UK Upper Tribunal deemed the scheme be ‘artificial and uncommercial’.
The highest contributors to the scheme allegedly included Take That frontman Gary Barlow and Weakest Link presenter Anne Robinson, who are believed to have both paid in more than £4 million.
Mr Barlow was also exposed, alongside comedian Jimmy Carr, for using the Jersey-based K2 aggressive avoidance scheme in 2012.
Penny Ciniewicz, HMRC’s director general for customer compliance, said that the ruling was a ‘brilliant victory’, which would bring in millions of pounds for the UK treasury.
The Clavis Liberty Fund 1 LP was dissolved on 17 June 2009, according to the Island’s companies registry website. Its registered address at the time was 13 Castle Street, St Helier.
