Take That: Gary Barlow and other former boy band members face repaying tens of millions of pounds of avoided tax

Judge rules that investment scheme was tax-avoidance in disguise

Members of the former boy band Take That could be forced to repay tens of millions of pounds after a judge ruled that an investment scheme was tax-avoidance in disguise.

Gary Barlow, Howard Donald, Mark Owen and their manager, Jonathan Wild, reportedly invested £66m in Icebreaker partnerships which were billed as music-industry investment schemes.

Judge Colin Bishopp ruled, however, that Icebreaker was a tax-avoidance scheme and HM Revenue & Customs is now expected to demand repayment of the tax relief.

The judge said: “Icebreaker is, and was known and understood by all concerned to be, a tax-avoidance scheme. The predominant purpose of entering the scheme was to achieve a tax saving.”

None of the 51 Icebreaker partnerships made a profit despite supposedly investing in a range of artists, some of them new and others well-established.

Investments in the scheme were boosted by members by taking out loans with Barclays and SG Hambros banks which served no discernable purpose but to inflate the amounts which could be offset against tax.

At least £300m was placed in the scheme, set up by the company Icebreaker Management, and the average investor is now expected to have to pay back £357,000. The Take That stars are likely to have to repay much more, though not Jason Orange nor Robbie Williams as neither is believed to have been involved in the scheme.

Almost 1,000 investors are understood to have paid into more than 51 Icebreaker partnerships between them and the judge dismissed arguments they had been set up for commercial purposes or profit.

A spokesman for Icebreaker Management was reported as saying the decision puts potential funding for the music industry “in jeopardy”.

An HMRC spokesperson said: “HMRC has put in place generous reliefs to support genuine business investment and our tax reliefs for the creative industries work well, enabling the UK’s world-class film, television and video production companies to compete on the global stage.

“But we will not tolerate abuse of the system by people trying to dodge their tax obligations. HMRC will continue to challenge in the courts and anyone who engages in tax avoidance schemes risk not only the high cost of these schemes but also lay themselves open to penalties and, potentially, prosecution.”

There was no immediate comment from Take That members but statements previously made on their behalf have said they made significant tax and did not believe they were taking part in tax-avoidance.

ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs People

COO / Chief Operating Officer

£80 - 100k + Bonus: Guru Careers: A COO / Chief Operating Officer is needed to...

HR Manager - Kent - £45,000

£40000 - £45000 per annum: Ashdown Group: HR Manager / Training Manager (L&D /...

HR Manager - Edgware, London - £45,000

£40000 - £45000 per annum + Benefits: Ashdown Group: HR Manager - Edgware, Lon...

HR Manager - London - £40,000 + bonus

£32000 - £40000 per annum + bonus: Ashdown Group: HR Manager (Generalist) -Old...

Day In a Page

Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits