Comedian Jimmy Carr: I've made terrible error over tax

 
Jimmy Carr Jimmy Carr: No longer involved in the tax scheme

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Comedian Jimmy Carr says he has "made a terrible error of judgement" over using a tax avoidance scheme.

In a statement on his Twitter account, Mr Carr said he was no longer involved in the K2 tax shelter.

Prime Minister David Cameron on Wednesday called Mr Carr's use of the scheme "morally wrong".

But the PM refused to comment on Take That star Gary Barlow's tax affairs - saying it was a different case - after Labour called for his OBE to removed.

The K2 tax scheme used by Mr Carr is a way of lowering the amount of tax paid. It is legal and Mr Carr made clear in his statement it was fully disclosed to HMRC.

In a series of messages on Twitter Mr Carr said: "I appreciate as a comedian, people will expect me to 'make light' of this situation, but I'm not going to in this statement.

"As this is obviously a serious matter. I met with a financial advisor and he said to me 'Do you want to pay less tax? It's totally legal'. I said 'Yes'."

"I now realise I've made a terrible error of judgement.

"Although I've been advised the K2 Tax scheme is entirely legal, and has been fully disclosed to HMRC (Her Majesty's Revenue and Customs).

Analysis

Do regular taxpayers care whether a comedian pays his tax? Or do they think it a joke that he, and hundreds of others, are given the opportunity to avoid paying it?

The government says it wants to put an end to "contrived" avoidance schemes. It needs the extra tax income after all.

Next year it plans to bring in a new general anti-abuse rule, to stop cunning schemes designed solely to avoid tax.

But accountants are lining up to argue that the line between artificial avoidance and legitimate tax planning is blurred - and the proposals will not end disputes entirely.

Which side of the line is sheltering your family from inheritance tax? And what about tax breaks for investing in small businesses?

Clearly Jimmy Carr's "error of judgement" will not be the punchline to this story.

"I'm no longer involved in it and will in future conduct my financial affairs much more responsibly. Apologies to everyone. Jimmy Carr."

More than 1,000 people, including Mr Carr, are thought to be using the Jersey-based K2 scheme, which is said to be sheltering £168m a year from the Treasury.

Under the K2 scheme, an individual resigns from their company and any salary they subsequently receive is paid to an offshore trust.

Downing Street welcomed Mr Carr's apology.

A spokeswoman said: "HMRC are working hard to investigate the sort of scheme that Jimmy Carr had been reported to be involved in to ensure that they are not aggressively avoiding tax, and, if they are, they are closed down."

She defended Mr Cameron's decision to speak out about an individual's tax affairs - in contravention of normal government practice.

"The prime minister was expressing what probably lots of people felt after reading the coverage," she said.

Business Secretary Vince Cable also backed the prime minister, telling BBC Radio Sheffield he was not prepared to go "through a hit-list of our celebrities" but adding: "We just want people to pay their dues."

The Lib Dem minister said he did not use tax avoidance schemes himself and that, as far he knows, no members of the cabinet did either, saying: "We observe the law... but also try to set an example."

'Unfair'

According to The Times newspaper, which first published details of Mr Carr's tax arrangements, the K2 scheme enables members to pay income tax rates as low as 1%.

The prime minister was asked about Mr Carr's arrangement on Wednesday during a visit to Mexico for the G20 summit.

He told ITV News the comedian's tax affairs were "straightforward tax avoidance" and it was unfair on the people who pay to watch the comic perform that he was not paying his taxes in the same way that they did.

"I think some of these schemes - and I think particularly of the Jimmy Carr scheme - I have had time to read about and I just think this is completely wrong.

"People work hard, they pay their taxes, they save up to go to one of his shows. They buy the tickets. He is taking the money from those tickets and he, as far as I can see, is putting all of that into some very dodgy tax avoiding schemes.

Start Quote

I'm not in favour of tax avoidance obviously, but I don't think it is for politicians to lecture people about morality”

End Quote Ed Miliband Labour leader

"That is wrong. There is nothing wrong with people planning their tax affairs to invest in their pension and plan for their retirement - that sort of tax management is fine.

"But some of these schemes we have seen are quite frankly morally wrong. The government is acting by looking at a general anti-avoidance law but we do need to make progress on this.

"It is not fair on hard working people who do the right thing and pay their taxes to see these sorts of scams taking place."

'Take That'

Labour leader Ed Miliband opted not to join in with the chorus of criticism of the 8 Out of 10 Cats star's tax affairs.

He said: "I'm not in favour of tax avoidance obviously, but I don't think it is for politicians to lecture people about morality.

"I think what the politicians need to do is - if the wrong thing is happening - change the law to prevent that tax avoidance happening."

Shadow leader of the House of Commons Angela Eagle turned her fire on Take That star Gary Barlow, who with two bandmates, is facing questions about £26m they are alleged to have invested in a scheme that is facing a legal challenge from HMRC.

The Labour MP said: "The prime minister rushed to the TV studios to condemn the tax avoidance scheme used by Jimmy Carr but he did not take the opportunity to condemn as morally repugnant the tax avoidance scheme used by Conservative supporter Gary Barlow, who's given a whole new meaning to the phrase 'Take That'.

"If it's all so morally repugnant, why has he just been given an OBE in the birthday honours list?

"Why is the prime minister's view of what's dodgy in the tax system so partial? Sir Philip Green has interesting tax arrangements but far from being labelled morally repugnant in a Mexico TV studio, he's got a government review to head up."

Retail magnate Sir Philip has firmly denied avoiding hundreds of millions of pounds in tax by transferring ownership of his Arcadia business, saying that Arcadia was bought by his wife, Lady Green, in 2002 and because she has not lived in the UK for 15 years no tax was due on any dividends that were paid to her.

During a joint press conference with Burmese opposition leader Aung San Suu Kyi Mr Cameron declined to comment on Mr Barlow's tax affairs.

He said he was not "going to give a running commentary on different people's tax affairs", and said he had made "an exception yesterday... it was a particularly egregious example".

Mr Carr, who has satirised "fat cat" bankers, is reported to protect £3.3m a year from tax by channelling cash through the K2 scheme, which is under investigation by HMRC.

The comedian is thought to be one of more than 1,000 beneficiaries who shelter some £168m from the taxman each year using the company.

 

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  • rate this
    +14

    Comment number 1215.

    The day this story broke I recieved news that my daughter's disability benefit will be cut by half. Can't wait for the next telethon when rich performers generously give their time to ask low and average paid viewers to send money to provide sevices for disabled children which should be provided by the taxes they don't pay!

  • rate this
    +1

    Comment number 1214.

    One word: Vodafone.

  • Comment number 1213.

    All this user's posts have been removed.Why?

  • rate this
    +1

    Comment number 1212.

    Jimmy Carr says he has made a "terrible error of judgement".
    Doe this mean that Jimmy is going to return the dodgy tax dodge 'K2' mountain of cash that he owes HMRC?

  • rate this
    +8

    Comment number 1211.

    How on earth is this the main headline?? Didn't see anything like the same coverage about Vodaphone's HUGE tax avoidance that was much more costly to the public purse than Mr Carr and which the Tories seemed all too happy to let go. Or Phillip Green's tax avoidance for that matter. Tax avoidance is a big, important issue but turning it into tabloid, celebrity nonsense is very poor journalism.

  • rate this
    +1

    Comment number 1210.

    1153 IB at top end on headline taxes govt will take 85% of any income prior to it going to dependents. Used to be 95% at 50% top rate. This from Income tx, NI, VAT and inheritance tx. The enterprise economy cannot function without avoidance. The answer is a single rate of 25% on everything, no reliefs plus a high personal allowance to take the poor out of tax. Tax companies the same.

  • rate this
    +2

    Comment number 1209.

    The way things work is fundamently immoral. Capitalism itself is an immoral system which, sadly, reflects human nature. Jimmy Carr quite naturally said YES when he was offered the chance to retain more of his earnings. Who amongst us would refuse such an opportunity?

  • rate this
    +1

    Comment number 1208.

    As Denis Healey stated many years ago...

    ....the difference between tax avoidance and tax evasion is the thickness of a prison wall.

    Perhaps those who criticise Jimmy Carr should look carefully at their own arrangements and previous dealings - flipping houses to avoid capital gains tax for example?

  • rate this
    +1

    Comment number 1207.

    111 Johnnie Boy

    DC is not the Archbishop of Canterbury as you suggest. He is just crazy about the King James Bible & telling us that we are a Christian Nation, and despite his own faith being thin and rarely attending Church

    The real Archbish was not impressed with DC's proclamations, saying that DC never once mentioned God, and that the government did not have any proper mandate to govern?

  • rate this
    0

    Comment number 1206.

    Until the government closes these loopholes nothing will change. I have had companies calling me saying they can 'sort' out the way I pay taxes but I know my obligation so tell them, politely, where to go. You cannot blame people, who's main aim in life is money, from protecting their money. Blame the people who created the tax system and the laws that allow people to avoid their responsibilities.

  • rate this
    0

    Comment number 1205.

    Lets have all these footballers and celebrities tweet to say they are all in it together I wish

  • rate this
    +1

    Comment number 1204.

    6. andy helgesen

    But the fact that Vodafone got off a 6 billion tax bill..."
    -

    This figure always winds me up when stated as fact. The £6Bn sum was literally made up by Private Eye! Just to re-emphasise that: MADE UP! BY A MAGAZINE!

    Vodafone didn't know the amount, nor did HMRC. Why would a magazine have somehow got the exact figure?

    Now I've said that, cue the hive-mind downvotes.

  • rate this
    +18

    Comment number 1203.

    Well done Jimmy - hands up I'm sorry, I won't do it again, what more can one ask for? As for the accountant who says he doesn't sit in judgement on his clients' moral values - we must remember that the real evil parasites here are not greedy celebs or inept politicians but the accountants - they come up with these schemes and let their clients take the flack. They are the ones we need to tackle.

  • Comment number 1202.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    -1

    Comment number 1201.

    Lets not forget all those nice upfront mp's and there tax free expenses, not much seemed to happen to them. There are accountants and tax advise company's out there just waiting for the governments next budget etc so that they can work round it. Tax evasion v's tax avoidance one is illegal the other is not. Simples!

  • rate this
    +3

    Comment number 1200.

    Can't we just bin the 11,000 pages of current tax rules and come up with one a one page docurement.

    A single 33% tax rate for everyone in the UK, with a tax free threshold equal to the a 37.5 hour week on the minimum wage.

    Corporation tax drawn to the same level, so no more cooking the books.

  • rate this
    0

    Comment number 1199.

    I have never voted Tory. I believe in the truth. Truth is DC did not name and shame Jimmy Carr. Truth is he responded to a question about the Times newspaper article. If that’s inconvenient for you; too bad. If Jimmy Carr was not behaving unethically why is he now saying sorry?

  • rate this
    -1

    Comment number 1198.

    If income tax was completely done away with and tax on goods and services were banded so that everyday goods were low in the tax band but as one got to better and luxery goods the tax got higher there would be no reason to go to a tax haven.
    These lechers are only saving on income tax do away with that ,and make them pay for what they buy.

  • rate this
    +1

    Comment number 1197.

    All those people who quote bigger tax avoiders, are they saying that this makes is OK for Mr Carr then?
    Sorry but two wrongs don't make a right.

  • rate this
    +2

    Comment number 1196.

    1167. ListysDad JCs response was damage limitation, nothing more nothing less. If you get your lawyers to find loopholes to avoid tax you know exactly what you are doing. Its time we made Tax avoidance a prisonable offence rather than an after thought.

 

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