Take That is in trouble with the taxman.
Members of the British boyband face having to pay back tens of millions of pounds after a U.K. tribunal ruled that they and others took part in a mass-scale tax avoidance scheme.
A judge has ruled that Gary Barlow, Howard Donald, Mark Owen and manager Jonathan Wilde had plugged millions into a music industry investment vehicle that turned out to be an illicit tax-shelter. There’s no suggestion that other band members Robbie Williams or Jason Orange were involved in the alleged scam.
According to The Times of London, the Take That members poured £66 million ($111 million) into two dubious partnerships, set up by a company called Icebreaker Management. It is claimed the musicians were able to avoid tax on about £63 million ($106 million) from tours and CD sales, and they could be forced to pay back £20 milllion ($33 million).
Judge Colin Bishopp said: “Icebreaker is, and was known and understood by all concerned to be, a tax avoidance scheme.” The aim, the tax judge continued, “was to secure [tax] relief for members, and to inflate the scale of the relief by unnecessary borrowing.”
A spokesman for Icebreaker Management told reporters: “This decision puts valuable funding for the U.K.’s independent music industry in jeopardy.”
The singers are said to be among 1,000 investors who sheltered more than £480 million ($809 million) through Icebreaker partnerships, which have been under the microscope since details were exposed in a Times investigation back in 2012.
At the time, the pop group’s legal reps said the investments were legitimate enterprises and not schemes designed to avoid tax. It’s unclear whether the artists will appeal the ruling.
Take That enjoyed hits around the globe during an inexorable rise in the early 1990s, during which time they became the first band since the Beatles to achieve four consecutive U.K. No. 1 singles.
Robbie Williams quit in 1995 before going on have his own remarkable solo career which, for a stage in the 2000s, saw him become arguably the biggest male pop star outside of the United States.
The boyband has been on the comeback trail in recent years, with impressive results. Take That reunited without Williams for the blockbuster 2006 album “Beautiful World,” the tour for which sold more than 500,000 tickets in the U.K and Ireland. They repeated the feat with the 2008 album “The Circus,” which broke British box-office records when its tour sold 600,000 tickets in less than five hours.
Take That’s famous five reunited for a sixth studio album, 2010’s “Progress,” and its supporting tour. With Williams back in the fold, they were an unstoppable force. “Progress” (Polydor) managed to sell more than 235,000 copies on its first day on sale (Nov. 15) in the U.K., according to the Official Charts Company, for the biggest day-one sale since Oasis’ “Be Here Now” shifted 424,000 in 1997. Take That played the 2012 London Olympics closing ceremony without Williams.
To date, the band has enjoyed 11 No. 1 singles in the U.K. Owen revealed last year that the group was working on a new album.