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
    +3

    Comment number 1635.

    Not so long ago, Cameron was tackled on the subject of tax avoidance... http://news.bbc.co.uk/today/hi/today/newsid_9715000/9715304.stm ... makes for interesting listening and lends the idea that Cameron is being evasive and deliberately blinkered on the subject ... as well as saying one thing while accepting and effectively encouraging the opposite.

  • rate this
    0

    Comment number 1634.

    I dont think it is unfair. He should go for it. We all try an avoid paying for things one way or another, its just that some people will try harder than others. Good luck to anyone who wants to pay less

  • rate this
    +1

    Comment number 1633.

    There's quite a difference between on the one hand, a scheme like K2 where the form (receiving a loan) doesn't match the substance (being paid for an employment) and manages to scrape through the legislation, and on the other Lady Green owning a company and not not being resident here (unless she agrees to push money back to hubby)
    Does the new disguised remuneration rule catch K2 scenarios?

  • rate this
    +1

    Comment number 1632.

    1598.AntXXG
    "If everyone paid 1 percent tax we would have no education / no NHS / no Policing etc .. "

    No, it just means that with the money not being paid in tax you would now try and get the same things privately. The money does not just vanish because it was not taken in tax, it would be in your take home pay instead.

  • rate this
    +5

    Comment number 1631.

    Jimmy Carr is no where near as bad as these large UK companies avoiding tax by setting up companies in Luxembourg and laundering money back and forth in the name of 'tax efficiency'.

    Where's Mr Cameron's whine about them? Mr Carr is a merely a scapegoat. A pawn in a poorly played game of chess.

  • rate this
    +1

    Comment number 1630.

    1387. hovertewater1 OOOH touched a nerve!! definition of Hypocrite:

    "1. a person who pretends to have virtues, moral or religious principles etc, that he or she does not actually possess, especially a person whose actions belie stated beliefs."

    DC expounds "do as i say not do as i do" .... as we're all in it together !

    HAH! get real

  • rate this
    +4

    Comment number 1629.

    1) Jimmy has done absolutely nothing wrong.
    2) Wouldn't we would all like to pay less tax?
    3) The problem isn't his, it is the massively overcomplicated tax rules.
    4) Cameron would do better to work to change the tax laws than to attack an individual's morality over his tax affairs.
    5) How about recouping the £2bn Vodafone tax bill for starters?

  • rate this
    0

    Comment number 1628.

    I can only assume the people on here who are questioning Jimmy Carr's morality have never paid a tradesperson in cash to avoid the VAT? Or perhaps moved in with their partner/ took in a lodger and didn't inform the council tax dept/ HMRC? The sums might be vastly different but the principle, and therefore the morality, is identical.

  • rate this
    +4

    Comment number 1627.

    Any comment from Cameron yet about his dad's tax-avoided millions? Maybe it's not morally wrong when the ruling class does it.

  • rate this
    -1

    Comment number 1626.

    The easiest cheapest probably fairest way of collecting tax? Have one tax, Purchase Tax. Everyone buys stuff. Take a car, tax throughout the build of one - wages etc & tax on top. If that tax was put on back end, price probably wouldn't change much and people have bit of choice. They won't do it, too simple to work out, visible how much you pay, and no over-employment in govt tax dept.

  • rate this
    +2

    Comment number 1625.

    It was legal. So what ? Then the law should be different. It is well known that lawyers and accountants always know all the legal tricks to make the most of the loopholes in the law. So who is to blame ?

  • rate this
    +10

    Comment number 1624.

    1585.Balloon Rake
    "Jimmy Carr should be jailed because of this scam"
    -----
    Why? What has he done?

    The scheme he was involved in was perfectly legal and he informed HMRC of his actions - he did everything by the book; no deceptions, no lies.

    We can't throw people in jail simply because they do things we don't agree with, where would it end?

  • rate this
    0

    Comment number 1623.

    All this tax evasion by the wealthy has been going on for many years under different governments, it's about time that one of the political parties made it illegal. I thank god that Mr Carr hasn't been funded by any of my cash oh but hang on........yes he has through the BBC!!!!!!!!!!!!!!

  • rate this
    +4

    Comment number 1622.

    I like the French solution when dealing with the thoughtless rich. It involved a guillotine...

  • rate this
    +2

    Comment number 1621.

    Ironic that a Senior member of the Houses of Parliament (notorious for encouraging excess expense claims by the Members) should now be a pot calling the kettle black!

  • rate this
    +2

    Comment number 1620.

    MP's have been doing this for years, and I notice Jimmy uses the same retoric as them 'made a terrible error of judgement' So if he gets had up, I expect to see many MP's treated the same.........somehow I dont think that will be the case do you. There are MP's and sheeple. Sheeple live under a different rule, we know that.

  • rate this
    +2

    Comment number 1619.

    Relying on someone's morality to pay their full rate of tax is like relying on people's not to steal your stuff. You hope most people will do the right thing but common sense dictates that somone out there is going to do the wrong thing.

    If the polticians find the ability to do this as so morally repugnant then they're the ones that can stop it happening.

  • rate this
    +4

    Comment number 1618.

    "Downing Street welcomes Jimmy Carr's apology and decision to re-arrange his tax affairs" - BBC

    Why have these loopholes been engineered in the first place?

    Why is the might of the government focussed on 1 person?

    How about the really big fat cats just out of vision?

    How about Vodafone & Amazon? Lycamobile & their corporation tax vacuum but £30k towards the tories in the last 9 months?

  • rate this
    +2

    Comment number 1617.

    Since when has mankind had any morals! Who in their right minds wouldn`t avoid paying tax if they could. Jimmy Carr has not broken any laws and for David Cameron and the gutter media to suggest it is immoral is a bit rich! For heavens sake let`s get a grip on reality before we all con ourselves into thinking that we are a caring society

  • rate this
    -1

    Comment number 1616.

    The celebrity industry works hard for Comic Relief, Sport Relief etc, appealing to the greater public to pick up the phone and donate to those much worse off than us. Maybe they're thinking of giving the extra money they save in off-shore funds, to those where sanitation, health-care and education are a privilege. Give them a break, eh!?!

 

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