ONE DIRECTION have been slapped with an eye-watering $45 million tax bill during their hiatus.
According to The Sun, the British boyband have been ordered to pay the staggering amount — believed to be one of the biggest such debts in pop history — but they have now appealed the ruling.
Newly filed accounts for 1D Media — which handles the fortunes of Harry Styles, Niall Horan, Louis Tomlinson and Liam Payne — say the dispute is “the subject of litigation by the company”.
Their big-money battle comes after The Sun revealed in March 2016 how they were facing a probe by HM Revenue & Customs over the firm’s organisation into a controversial “alphabet scheme”.
A source said: “Being one of the world’s most successful music acts unfortunately can come at a hefty price.
“Their firm decided to use an alphabet scheme for the hundreds of millions of pounds they earned. It means shares are grouped into categories — such as A to J — and allows profits to be paid in the form of dividends at different rates.
“However, while legal, HMRC inspectors have since decided to crack down and target them as potential measures of avoiding tax.
“Because dividends are not subject to National Insurance contributions like wages, they have less tax deducted from them than is taken off salaries.
“It means One Direction could now be set to pay back a huge sum to the taxman.”
While a huge bill like that would send us mere mortals into instant bankruptcy, if the singers have to cough up the debt, it shouldn’t dent their fortunes too severely.
Last year the musical juggernaut made $115 million before tax and their company posted profits of $56 million. After resigning as directors of 1D Media in April 2016, the boys made $25 million each from selling just 10 shares in the firm and have continued to watch the money roll in with their solo careers.
There is no suggestion current band members — or Zayne Malik, who quit 1D in March 2015 — have engaged in tax evasion, which is illegal.
A 1D source has previously insisted the share classes were set up to account for Malik’s departure from the band and to “differentiate his right to receive income”.