Carr admits 'terrible error of judgment'
British comedian Jimmy Carr today said he had made a “terrible error of judgment” over his tax arrangements.
He spoke out after prime minister David Cameron branded his tax dodging “morally wrong” for seeking to avoid taxes.
Media reports of Mr Carr’s tax arrangements suggest he is undertaking “straightforward tax avoidance”, said Mr Cameron.
The comedian released a statement saying: “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.
Mr Cameron, speaking last night during a visit to Mexico, joined a chorus of criticism of the comedian, whose tax arrangements were revealed in The Times newspaper.
Describing them as “straightforward tax avoidance”, the PM said it was unfair on the people who pay to watch the comic perform that he is not paying his taxes in the same way that they do.
Mr Cameron said: “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.
Jimmy Carr took to Twitter this morning to admit to a 'terrible error of judgment'
“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.”
Meanwhile, British treasury minister David Gauke today warned people using the K2 scheme that there were “serious doubts” about whether it would work and that they could still find themselves facing bills for more tax.
He said: “I don’t think they should make any assumptions on that. Very often these schemes fail and HMRC, if at all possible, will close down the schemes and also recover the tax, because if they don’t work they don’t work.”
Mr Gauke also defended Mr Cameron’s criticism of Mr Carr after Labour leader Ed Miliband said it was not for politicians to “lecture people about morality”.
Mr Miliband said last night: “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 and I think that is the right course the government should take.
“Instead they are taking the wrong course which, as I say, is cutting taxes for millionaires.”
Mr Gauke told BBC Radio 4’s Today programme: “Whether something is against the law or not, morality is bigger than that, and I don’t think it’s fair, when most people are paying income tax and national insurance at 32 per cent or 42 per cent, that very wealthy people enter into arrangements that are clearly a contrivance.
“In those circumstances I think it’s perfectly reasonable for politicians to say ‘that’s not acceptable, I don’t think that’s the right thing to do’, and that’s exactly what the prime minister and other ministers have been doing over the past few days.”