Sunday 21 December 2014

Top Irish soccer stars linked to tax-plan scandal

Avoidance scheme stood to save investors millions

Roisin Burke & Nick Webb

Published 18/05/2014 | 02:30

15 November 2011; Republic of Ireland's Stephen Hunt, left, and Kevin Doyle, celebrate in the team dressing room after the game. UEFA EURO2012 Qualifying Play-off 2nd leg, Republic of Ireland v Estonia, Aviva Stadium, Lansdowne Road, Dublin. Picture credit: David Maher / SPORTSFILE
Republic of Ireland internationals Stephen Hunt (left) and Kevin Doyle invested in a tax avoidance scheme, but both insist that their tax affairs are in order. Photo: David Maher / SPORTSFILE
Kevin Doyle. Photo: Sportsfile
Stephen Hunt
Gary Barlow
Terry Venables

Irish premiership footballers Kevin Doyle and Stephen Hunt have emerged as investors in a tax shelter scheme that was part of Icebreaker, the controversial setup used by top sports and music stars to avoid millions in tax, the Sunday Independent can reveal.

The £36m (€44.2m) Icebreaker scheme, where Take That singer Gary Barlow and his bandmates were among those investing, was described by a British court as set up to reduce their tax bill.

Former England football manager Terry Venables and Olympic athlete Colin Jackson were also directors of Icebreaker partner investments.

AIB film investment executive Kieran O'Driscoll is also listed as director of one of the Icebreaker schemes.

While both men confirmed when contacted that their tax affairs were in order and up to date, both Doyle and Hunt, along with Venables are directors of Starbrooke, one of dozens of Icebreaker investment vehicles described by the British courts as tax avoidance schemes.

Starbrooke invested £6.9m in a book about Barcelona FC and two music albums, but generated just £1,937, (€2,377) according to court documents.

Last week a judge ruled that Icebreaker Management had helped Barlow and Take That bandmates avoid paying millions in tax.

The Icebreaker schemes invested in music and film projects, availing of tax reliefs intended to help creative industries. Losses could be used by members to offset against their tax liabilities.

Her Majesty's Revenue and Customs is expected to demand repayment of tax reliefs from Icebreaker.

In a British court case taken by the British tax authorities, where Starbrooke was among the Icebreaker partners' schemes named in the case, the judge said: "The Icebreaker scheme is, and was known and understood by all concerned to be, a tax avoidance scheme."

The partnerships would make deals over intellectual property rights but the judge found this mechanism was set up in a way that losses were inevitable.

British Revenue told the Sunday Independent it didn't comment on individuals but said of Icebreaker: "The scheme generates income tax losses for wealthy individuals who 'invest' funds in Limited Liability Partnerships (LLPs).

"Up to 80 per cent of the amounts 'invested' are borrowed from banks and returned to the same banks shortly afterwards. The only significant return for the partners is their tax relief, which is considerably greater than their actual cash contribution.

"Tax avoidance is bending the rules of the tax system to gain a tax advantage that Parliament never intended. It often involves contrived, artificial transactions that serve little or no purpose other than to produce a tax advantage. It involves operating within the letter – but not the spirit – of the law."

There were 50 partnerships investing in Icebreaker, including Starbrooke, where Hunt and Doyle were involved. Icebreaker claimed total losses of £446m.

"I have not received any tax benefit from this investment, my UK tax returns are up to date and paid in full," Kevin Doyle said in a statement to this paper on Friday.

Speaking on his behalf, Stephen Hunt's solicitor said that Mr Hunt's taxes were "paid in full and are fully up to date". Mr Hunt declined to comment further.

Other premier league footballers have invested in controversial financial schemes linked with legal tax avoidance.

Irish star Robbie Keane was named last year as among top soccer stars like Wayne Rooney and Steven Gerrard who invested in such schemes which were backed by millions.

Tax shelter schemes typically involved clients' investment in film, music or fine wine ventures. The judge in this case said that the schemes had substantially failed in their purpose.

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