It is "not necessary" for Gary Barlow to return his OBE despite his involvement in an aggressive tax avoidance scheme, the Prime Minister has told Good Morning Britain.
David Cameron said the Take That singer had "done a huge amount for the country".
But the Prime Minister said the scheme that Barlow and bandmates Howard Donald and Mark Owen invested in was clearly "wrong" and said: "It's right that they are going to have to pay back the money."
The Take That trio may have to pay back £26 million after Judge Colin Bishop ruled that 51 partnerships set up by Icebreaker Management were used for tax avoidance purposes.
A management company for three stars of pop band Take That has said it is "extremely disappointed" with a court ruling that they may need to pay millions of pounds after claims of tax avoidance.
Icebreaker Management set up 51 partnerships for investments totalling £26 million from Take That members Gary Barlow, Howard Donald and Mark Owen, but Judge Colin Bishopp said the partnerships - styled as music industry investment schemes - were used for tax avoidance.
Icebreaker Management said it was considering the ruling and whether to appeal, but HMRC said: "We will not tolerate abuse of the system by people trying to dodge their tax obligations."
Take That's Gary Barlow, Howard Donald and Mark Owen have today refused to comment on reports that they face having to pay tens of millions of pounds in tax after a court ruling.
The three band members invested at least £26 million into two-partnerships styled as music-industry investment schemes, The Times reported, but yesterday Judge Colin Bishopp ruled that 51 partnerships set up by Icebreaker Management were used for tax avoidance purposes.
In his ruling, the judge said: "The Icebreaker scheme is, and was known and understood by all concerned to be, a tax avoidance scheme."
Take That's lawyers insisted the bandmates believed the investments, which were made in 2012, were legitimate enterprises and that all four named paid "significant tax", according to reports.
There has been no suggestion that fellow Take That bandmates Jason Orange and Robbie Williams were involved in the scheme.
A spokesman for Take That said today there was no comment from Barlow, Donald or Owen.
Robbie Williams has said he will not be taking part in a forthcoming Take That tour and album, although the singer insisted he has not quit the group.
Speaking to The Sun, Williams put the decision down to the demands of his solo career and the fact he is expecting a second child.
“Logistically I can’t do it. I have the [solo] tour and I’m going to be a dad again," he said.
But he stressed he was not calling time on the band, saying:
“It doesn’t mean to say I won’t join in along the way. Whatever happens, I am absolutely going to be in Take That — I love being in Take That.”
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The X Factor judge Gary Barlow has said he has closed his music label Future Records because he has too many commitments, including his home life.
All of the artists signed up to the Take That star's Future Records are to be taken over by the label's parent company Universal.
Barlow, whose fourth child, Poppy, was stillborn in August, told The Sun: "It's been a very difficult decision but it came down to time. I've had a lot going on recently and I want to spend more time with my family."
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The publicist for comedian Jimmy Carr has told PRWeek that he has been advising Carr on how to handle the tax avoidance affair. The Corporation chairman Gary Farrow spoke of the decision to issue an apology:
You’ve got to deal with it and take it on the chin. We’re working around it. It’s going to plateau out - he hasn’t taken drugs and he hasn’t been caught with a hooker. He hasn’t broken the law.