Red carpet: Williams with his wife Ayda
A decision to award Robbie Williams an honour was overturned because he had used a controversial investment scheme.
The former Take That singer was nominated for a gong last year for his charity work and success as a pop star.
The honours committee initially granted him an OBE but later decided against it following an intervention by the taxman.
Williams, 45, is the first celebrity known to have fallen foul of a new ‘honours blacklist’ for wealthy individuals with question marks over their tax affairs. The rules came in shortly after he was nominated for an OBE.
The senior HMRC civil servant who informed the honours committee of its veto suggested Williams was himself to blame.
‘If you do not pay your dues to the Athenaeum you cannot expect to enjoy the benefits,’ the official reportedly said, referring to a Pall Mall club frequented by Whitehall mandarins.
In addition, Williams had challenged HMRC over his tax affairs – which is also said to have been a factor in the scrapping of his OBE. ‘They did not like the fact that he had contested the matter,’ said an insider.
‘It came up in discussions about whether to give him an award.’
Another Take That singer, Gary Barlow, was embroiled in a similar controversy but kept his OBE. He had to pay back millions to HMRC because he took part in a scheme judged to be an artificial tax shelter.
Barlow, 48, said it was ‘stupidest thing I have ever done’. He and fellow Take That members Howard Donald, 51, and Mark Owen, 47, had to repay £20million. They insisted they had believed the investments were legitimate enterprises and had all paid significant tax.
The former Take That singer (left) was nominated for a gong last year for his charity work and success as a pop star. Another Take That singer Gary Barlow (right) was embroiled in a similar controversy but kept his OBE
The scandal emerged days after Barlow’s OBE was announced.
David Cameron criticised the singer, who campaigned with the Tories in the 2010 election, saying aggressive tax avoidance was wrong. However, the former prime minister said he should be allowed to keep his award because of his charity work.
Williams, who is the highest selling British solo singer, was nominated for an OBE for his ‘contribution to the entertainments industry and Soccer Aid charity’.
But in 2015 it emerged he was one of 140 celebrities linked to a film investment scheme. He was said to have paid £2million to investment firm Ingenious Media.
Set up to help people defer their tax liability, it required a £50,000 stake. Customers were able to claim tax relief against almost the entire sum they put into the partnership.
Truth about fund that Williams poured £2m into
Robbie Williams is said to have invested £2million in a controversial film fund accused of tax avoidance.
He put his money into Inside Track Productions, which is run by Ingenious Media. The fund was set up in 2002 after Gordon Brown introduced a policy to help fund the movie business in Britain.
Ingenious insists its film investments were legitimate commercial ventures and not tax avoidance schemes.
But they also enabled customers to defer millions from their tax bills by offsetting their other income against losses made through the firm.
For example, if they earned £3million a year from their own activities, the investors would ordinarily have paid the then going rate of 40 per cent tax on almost all of that income.
Instead, by investing £2million in a film partnership, they would only be liable for tax on the remaining £1million that year.
In addition, they were also entitled to a percentage of the films’ profits.
Other stars who put money into Inside Track included the Beckhams, Ant and Dec, Anne Robinson and Jeremy Paxman.
It is not known if any of the investors claimed the tax breaks – and there is no suggestion they realised the fund could be viewed as a tax avoidance scheme.
Movies funded by Ingenious included The Best Exotic Marigold Hotel and Vera Drake.
The firm has always disputed claims by HMRC that it amounted to tax avoidance and is involved in a long-running and complicated legal appeal. A tribunal previously found that, while Ingenious traded legitimately, investors were not entitled to the tax reliefs claimed.
Williams’ Soccer Aid celebrity football matches have raised £20million for Unicef UK.
He is also an ambassador for the UN body and last week became co-owner of the Liverpool-based MLA music and performing arts university in an attempt to help young musicians.
Williams is not the first celebrity to be banned from an honour because of his tax affairs.
David Beckham was furious when it emerged in 2017 that the taxman vetoed a knighthood for him that year.
There were reports that another footballer, Wayne Rooney, had been turned down over a potential £3.5million tax bill.
The HMRC has blacklisted about 150 celebrities and public figures put for forward for honours over similar tax schemes. It has introduced a ‘traffic lights’ procedure to vet individuals who invest in such schemes.
It disclosed that up to 43 people recommended for a knighthood or another honour have been flagged as ‘red’ or ‘high risk’ since 2013.
This rating is for those who use these schemes on a ‘serial basis’, are under criminal investigation for tax fraud or are known to use offshore havens.
Asked about Williams, a Cabinet Office spokesman said last night: ‘We do not comment on individual cases. Robust checks are carried out on the probity of everyone who is nominated for an honour.’
HMRC declined to comment. A spokesman for Williams made no comment.