Jimmy Carr has pulled out of the controversial tax-avoidance scheme that even David Cameron has referred to as ‘dodgy' and a ‘scam’.
The comic took to Twitter to apologise for his ‘terrible error of judgement’ over the K2 scheme, which used an offshore haven to protect most of his £3million-a-year earnings from tax.
Speaking officially for the first time since news of his tax affairs broke, Carr tweeted this morning: ‘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), I’m no longer involved in it and will in future conduct my financial affairs much more responsibly. Apologies to everyone.’
The comments came after the Prime Minister waded into the row about Carr’s tax position.
Speaking at the G20 summit in Mexico, 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.
In the interview with ITV News, he added: '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.'
It is rare for a Prime Minister to make an attack on an individual's financial arrangements, and his comments could open the door for scrutiny of any Conservative supporter’s tax affairs.
Before this morning’s tweets, Carr’s only comments on the reports came when he was heckled at a show in Tunbridge Wells. Then he said: ‘I pay what I have to and not a penny more.’
On Monday, Carr was exposed as using the legal K2 scheme to put most of his earnings into an offshore company, which then ‘lends’ him the money back, tax-free.
Carr had previously lambasted Barclays for using tax-avoidance loopholes in a 10 O’Clock Live sketch.
Other Ministers have branded the K2 scheme – used by more than 1,000 British residents – ‘morally repugnant’, and Revenue & Customs said that it would take steps to close it down.
Danny Alexander, the Chief Secretary to the Treasury, said: ‘People who dodge the tax system are the moral equivalent of benefit cheats and we are coming to get them. We are taking steps to ensure that everyone pays their fair share.’
That prompted singer Lily Allen to chip in: 'How are tax avoiders "the moral equivalent of benefit cheats"? . Surely they're a hundred times worse ?