Comedian Jimmy Carr 'has €4m in tax avoidance scheme'
IRISH-born comic Jimmy Carr is one of thousands of wealthy British residents paying as little as one per cent income tax using a legal offshore scheme, it has been claimed.
The comedian is alleged to be the largest beneficiary of the K2 tax scheme, which protects £168m a year from the taxman in Jersey.
According to a special investigation by a UK newspaper, thousands of high earners in Britain use the scheme to carefully do their accounting “under the radar”.
It claims an accountant disclosed Mr Carr had sheltered €4m (£3.3m) a year through the company.
Lawyers for the comedian have confirmed he is a member of K2, but categorically denied any wrongdoing, saying the scheme had been disclosed to the relevant authorities in line with the law.
The Government has already announced a crackdown on individual tax avoidance, which is estimated to account for £4.5bn of the £7bn lost in total each year.
Chancellor George Osborne has claimed he was left “shocked” after finding the extent to which multi-millionaires were exploiting tax loopholes and vowed to take “action”.
But shortly after he announced this year’s Budget, the Times newspaper alleges the K2 scheme assured its members “most of the powerful tax-saving opportunities survived unscathed.”
It has now published the details of an undercover investigation, in which an accountant promised to cut the tax bill on a £280,000 salary from £127,000 to just £3,500.
Roy Lyness, from Peak Performance Accountants which run the K2 scheme, told a seminar of businessmen: “It’s a game of cat and mouse. The Revenue closes one scheme, we find another way round it.
“It’s like a sat nav. I’m driving to Manchester, get a message saying there’s a smash at Stoke, press the button to re-route. That’s all we do with tax avoidance.”
He added the company did not broadcast the scheme because doing so would be like a “red rag to a bull”.
The scheme works by transferring salaries into a trust based in Jersey, which will then lend investors back the money. The loan, which can technically be recalled, is not subject to income tax.
In April, George Osborne told The Daily Telegraph: “I was shocked to see that some of the very wealthiest people in the country have organised their tax affairs, and to be fair it’s within the tax laws, so that they were regularly paying virtually no income tax. And I don’t think that’s right.
“I’m talking about people right at the top. I’m talking about people with incomes of many millions of pounds a year. The general principle is that people should pay income tax and that includes people with the highest incomes.
“I’m not allowed to be shown the names of the individuals but I’ve sat with the most senior people at the Inland Revenue, the people who run some of the high net worth units there. They have given me examples, anonymised examples, and so we are taking action.”
Limerick-born Jimmy Carr, who performed at the Queen’s Diamond Jubilee celebrations, is a stand up comedian and is currently best known as the host of Channel 4’s 8 out of 10 Cats.
On the show Ten O'Clock Live he performed a sketch lampooning Barclays over its tax arrangements, and referred to "the world's biggest, most aggressive team of blood-hungry amoral tax lawyers."