The comedian has changed his tax affairs after the tax-avoidance scheme – in which several celebrities including a couple of members of Take That also invested – was revealed by The Times this week.
Prime Minister David Cameron has also jumped on the opportunity to deflect attention from his beleaguered government by labelling the scheme ‘morally wrong’.
Carr apologised in a series of tweets last night…
“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 judgment.
“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], I’m no longer involved in it and will in future conduct my financial affairs much more responsibly. Apologies to everyone. Jimmy Carr.”
Basically the K2 scheme, which is based in Jersey, protected £3.3m a year by accepting rich people’s cash and returning it to them by form of a loan, which isn’t subject to income tax.
The situation surrounding Gary Barlow is also highly embarrassing seeing as he’s recently received an OBE.
Anyway, this is what Cameron had to say…
“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.
“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 hardworking people who do the right thing and pay their taxes to see these sorts of scams taking place.”
A spokesman for HRMC said that a special investigation into the scheme has been launched: “We are now preparing to litigate Icebreaker 2 but for legal reasons cannot say more at this time. We examine the implementation of avoidance schemes in detail and will not let any aspect of these cases go unchallenged.”