Icebreaker and Others v HMRC  UKFTT 416 (TC)
Wednesday 7 May 2014
Jonathan Davey of Wilberforce Chambers has been acting for HMRC, along with Peter Blair QC of Guildhall Chambers and Imran Afzal of Gray’s Inn Tax Chambers, in the long-running Icebreaker litigation. The First-tier Tax Tribunal has just delivered its eagerly anticipated judgment in respect of the latest chapter of the dispute, which made the front page of The Times in the run up to trial under the headline “Taxman v Take That“, and has now given rise to the follow-up headline “Take That, Barlow“.
The cases involves a £350 million appeal in respect of the proper tax treatment of limited liability partnerships involved in the creative industries, and the high net worth individuals who invest in those partnerships. The case has attracted strong media attention due to the involvement of various celebrities including Gary Barlow and other members of Take That, and the interest that the Prime Minister has shown in the matter.
In a 150-page judgment, the Tax Tribunal (Judge Colin Bishopp) has found in favour of HMRC. On the central issue of whether individuals invested in the scheme as a conventional investment opportunity, the Tribunal rejected the evidence of the appellants, finding that that the “predominant purpose in entering into the scheme was to achieve a tax saving” and that “these [partnerships] were, and were recognised by individual referrals to be, tax avoidance schemes”.
It is not yet known whether the appellants will seek to appeal the decision.
Download the Judgment (Crown Copyright)