Katie Melua admits being 'clueless' about tax scheme

Katie Melua singing with guitar

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Singer Katie Melua says she was "clueless and inexperienced" when she signed up to a tax avoidance scheme known as Liberty.

The star said her financial advisors had suggested she use the tax strategy when she was in her early twenties.

She is one of hundreds of wealthy individuals revealed this week to be involved in the investment scheme.

Previously she had been lauded as a "tax super hero" by Christian Aid, for paying her taxes in full.

Now the charity has dubbed the singer a "fallen hero".

Ms Melua said in a statement on her website that it "sucks" being in the spotlight over this issue and suggested that tax avoidance schemes should be stopped altogether to prevent others being advised to use them.

The Liberty tax strategy is reported to have helped shelter £1.2bn from the Treasury. Celebrities, doctors, judges and businessmen are among the 1,600 individuals on a list leaked to The Times who are alleged to have used the legal but controversial scheme between 2005 and 2009.

Start Quote

Laws should be changed to disallow schemes like this, so that they would never be presented by legitimate tax experts to less experienced people like myself”

End Quote Katie Melua Singer
Embarrassed

The singer said she had made up the full amount of tax owed to the Treasury once the matter was drawn to her attention.

"I paid the full amount of tax years ago. My tax records are completely up to date and I don't owe HMRC any money,"

The now 29 year old Georgian-British singer said: "That I was fairly clueless and inexperienced when it came to finance goes without saying and, I'm embarrassed to admit, not as interested in it as I should have been."

The Liberty scheme works by creating artificial tax losses on investments which can be off-set against the star's tax bill.

Christian Aid had previously lauded her attitude and nominated her as one of its "tax super heroes" in an ongoing campaign against tax avoidance, after she publicly praised the British tax system for delivering a high quality of public services and claimed she was paying nearly half of what she earned in tax.

Following this week's revelations Ms Melua suggested: "If there is ambiguity in the law then laws should be changed to disallow schemes like this, so that they would never be presented by legitimate tax experts to less experienced people like myself."

Other celebrities on the list include George Michael, Sir Michael Caine, Anne Robinson, Gary Barlow and four members of the Arctic Monkeys. They have not commented on the issue.

The Liberty scheme will be challenged in court next year.

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