I have just read that Jimmy Carr is one of the biggest benefactors from an offshore tax have called K2, Gary ‘OBE’ Barlow also benefits from a similar arrangement, perhaps this is why he got an OBE for his service in fiddling his tax. Oh sorry I forgot, it’s all legal.
TV comic Jimmy Carr has been outed as one of the celebrities making a mockery of Government pledges to clamp down on super-rich tax dodgers. And yesterday he was branded “morally repugnant” by Treasury Minister David Gauke for stashing up to £3.3million a year in an offshore fund that cuts tax bills to as little as 1%. Chancellor George Osborne promised to close loopholes used by the wealthy when he slashed the top rate of tax from 50p in the Budget. But accountants say most of the “powerful tax-saving opportunities” linked to the Jersey-based K2 tax scheme have escaped unscathed. Under the scheme customers’ earnings are channelled to K2 where they are sheltered from the taxman. The trust pays them the minimum wage of £10,800 – the only amount that is taxed – but “loans” them tens of thousands of pounds which never have to be repaid. Carr, best known as the host of Channel 4’s 8 out of 10 Cats, is said to be the biggest beneficiary of the fund which protects £168million a year from the taxman. The comic’s lawyers confirmed he is a member of K2, but denied any wrongdoing, stressing the scheme had been disclosed to the relevant authorities in line with the law. HM Revenue and Customs said that it had been investigating the scheme for months before its activities had come to light and intended to challenge it “in every way available”. Carr ridiculed Barclays for a tax avoidance scheme last year in a Ten O’Clock Live sketch. The revelations comes as Revenue and Customs claimed yesterday that members of Take That had invested at least £26million in a similar tax avoidance scheme. Gary Barlow – made an OBE by the Queen last week after masterminding the Diamond Jubilee’s spectacular musical celebration – Mark Owen, Howard Donald, and their manager Jonathan Wild are among nearly a thousand people who paid £480million into schemes allegedly serving as tax shelters for the rich. HMRC said it would try to close the loophole at a tribunal in November, forcing investors to repay.
How it works
Customers resign from their jobs and sign an employment contract with the Jersey-based trust. Their former bosses then pay their wages to K2 instead, where it is sheltered from the taxman. The Trust pays customers £10,800 a year, the minimum wage, and then loans them tens of thousands of pounds on top. The loan will then be assigned to Jersey’s Employer Funded Retirement Benefit scheme, and never needs to be called in. Customers only have to pay tax on the salary, which works out at just £3,500.