Cheryl is allegedly facing a huge tax demand after HMRC won a legal battle over her alleged avoidance schemes.
The former Girls Aloud singer, 38, may have to pay back taxes after HM Revenue & Customs won the test case, according to reports.
The music star lost a long-standing test case against the taxman after a judge found her personal firm CC Entertainments culpable of 'straightforward profit extraction' with an artificial employee bonus scheme.
This meant that the company allegedly paid capital gains tax instead of the pricier income tax and National Insurance, according to The Sun.
A tax tribunal ruling in favour of HMRC has now been released, and Judge Jennifer Dean has noted: "The appeal of CC Entertainments is a straightforward 'profit extraction' case where the single 100 per cent shareholder signed a contract of employment and was awarded a Growth Securities Ownership Plan said to qualify as an employment-related security."
HMRC can now ask the Sound of The Underground singer for back tax, which includes compound interest - but not fines or penalties.
Responding to the ruling, a HMRC spokesman told Mirror Online: “We welcome this ruling which confirms these were tax avoidance schemes. We are committed to ensuring that everyone pays the right tax at the right time to help fund our vital public services.”
The Mirror has reached out to Cheryl's representatives for further comment on this story.
A spokesman for the music star has already told Mail Online that they could not comment as the matter is part of an ongoing legal case.
It comes after reports claim that Cheryl's earnings have plummeted by fifty per cent after her pop career took a dramatic dip in recent years.
Cheryl's last single, Let You, debuted in 2019 as she attempted to make an epic music comeback.
However, her single just about made into the charts, landing at number 57.
The Geordie native - who shares son Bear with ex One Direction star Liam Payne - saw her wages plummet after the single flopped.
Cheryl first shot to fame 2002 upon winning a place in Girls Aloud.
The girl group was created through ITV's Popstars: The Rivals and went on to be one of the biggest and most successful girlbands to ever emerge from the UK.
