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
    +4

    Comment number 1675.

    How can David Cameron and all the other MPs complain about someone hiding money? They have been doing it for years. Have we all forgotten the MP expenses scandal of a few years ago. Hypocrites!

  • rate this
    0

    Comment number 1674.

    Yes, he's very sorry but not as sorry as he is about being found out!!! The heckles at his next gig could be funnier than him. He's had the benefit already is has been laughing all the way to the offshore Bank!

  • rate this
    +3

    Comment number 1673.

    Wasn't it the billionairre Leona Helmsley who said "Only the little people pay taxes"?

  • rate this
    +3

    Comment number 1672.

    This is the most transparent diversionary tactic I've ever seen. David Cameron is the person responsible for making the laws of the land, which Jimmy Carr isn't even breaking. If there is a villain of this piece then it's the government and the Prime Minister, who clearly aren't capable of making laws which are either enforceable or that actually work.

  • Comment number 1671.

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

  • rate this
    +3

    Comment number 1670.

    I think Cameron has opened a can of worms here and one he will probably regret as there is no doubt one or more of his "friends" using similar schemes

    He has the power to change it - legislate your the PM

  • rate this
    +1

    Comment number 1669.

    It is wrong to say that tax planning or fiddling - depending on your point of view - is only for the rich. Anyone can enter one of these schemes however the cost of the "experts" and lawyers is such that it probably outweighs any potential benefit. The simple fact is you have to have a large tax liability to make it worthwhile considering these schemes.

  • rate this
    +5

    Comment number 1668.

    How David Cameron can lecture anyone about morality is beyond me. He seems to think everyone has incredibly short memories.

  • rate this
    +1

    Comment number 1667.

    Its just a shame that these people who earn obscene amounts of money have to pay the British public back by cheating. He is not the only one. They all do it. When will people learn that "celebrity" and "politics" is taking us all for a ride. AS far as I am concerned Carr youre not funny any more.

  • rate this
    -3

    Comment number 1666.

    Good for --Jimmy Car---
    How dare --CAMERON--say its wrong to avoid tax legaly
    When politicans tax people when they die on savings That they have payed TAX on.
    GET LOST --CAMARON--
    LET PEOPLE DO WHAT THEY WANT WITH THERE MONEY

  • rate this
    +4

    Comment number 1665.

    I'd be interested to hear how many Conservative party donations have come from people who have benefited from these schemes?

    With its revived sense of morality does the party plans to return this money to the donors?

  • rate this
    +3

    Comment number 1664.

    The majority of tax payers in this country believe that it is necessary to pay tax to maintain a society that is civilised and fit to live in. A civilised society benefits the rich as well.This is a moral issue; there is a difference in making provision for your dependents, pensions etc, but how much money does one individual need. Trying to avoid paying tax on 3 million is pure greed.

  • rate this
    +7

    Comment number 1663.

    I'm more annoyed about politicians 'taking the moral high ground'. Jimmy Carr has been upfront and clear about his tax affairs and said that'll be it. He's handled it with respect and dignity. Mr Cameron, on the other hand, has not. Rather than picking on one person, everything should be investigated. Maybe he needs to look a little closer to home, i.e. his cabinet before he wades in too deep.

  • rate this
    +3

    Comment number 1662.

    I'm pleased Jimmy will now be paying a fair tax burden. But I can't help thinking he's played in David Cameron's hands. We don't need a PM who spends his days pointing fingers and opining about the moral status of tax avoidance schemes we need one that is prepared to legislate to close the loopholes they exploit. That's what we pay him to do.

  • rate this
    +4

    Comment number 1661.

    1. Jimmy Carr put this in the public domain by making fun out of it. Cameron then has every right to mention it.
    2. Tax avoidance schemes have been going on for years , libdem's have not been in that long. What about all the previous parties.
    3. Rich will always benefit , because they can hire specialised Tax , Accountants, Lawyers ETC.
    Get over it its called life.

  • rate this
    +5

    Comment number 1660.

    Interesting that our Secretary for International Development, the guy pleading for help for poor starving Africans, who recognises the damage that tax havens do, is himself a player.

    Hypocrisy, the backbone of and glue that binds the Tory Party.

  • rate this
    0

    Comment number 1659.

    The wealthiest can afford the best accountants and can afford the biggest contribution. Those who do this sort of thing need to be clamped down on.

  • rate this
    +2

    Comment number 1658.

    1623: leftrightleftright
    "All this tax evasion by the wealthy has been going on for many years under different governments"
    Tax avoidance. Evasion is illegal, avoidance is not.
    If you pay into a pension or have an ISA you're a tax avoider. Giving money or gifts to children/family/friends/charity involves tax avoidance.
    Not working/earning to 100% of your potential avoids tax. We all do it.

  • rate this
    +4

    Comment number 1657.

    Error of judgement? I think not. Jimmy Carr has done nothing wrong, & is probably only doing the same as some of Cameron's cabinet colleagues, political party benefactors, overpaid company directors and members of the banking fraternity.

    Whether it's morally acceptable is a different matter; everyone should pay their fair share - not just those of us who MUST pay tax through the PAYE system.

  • rate this
    +3

    Comment number 1656.

    Whilst I don't agree with what Carr did, if its LEGAL then whether it is moral or not is irrelevant. If we don't want people doing this type of thing, make it ILLEGAL. I bet there are many celebs, politicians, etc rushing to their tax advisers this morning to do one of two things - either get out of schemes like this or indeed get into one...

 

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