COMEDIAN JIMMY CARR is to pay around £500,000 in tax after leaving the controversial K2 tax avoidance scheme that left him paying a rate of just 1%.
As a result, his company is now paying full corporation tax. The legal, but infamously “morally repugnant” scheme worked by transferring salaries into a Jersey-based trust, which lent investors back the money. As the loan could technically be recalled, it was not subject to income tax. It sheltered £168m from the taxman annually.
As a result of the revelations, Carr became the face of the government’s battle against tax avoidance, with the prime minister branding the comedian’s tax affairs “dodgy” during a state visit to Mexico.
But the comic’s latest accounts for his business, FN Good Ltd, for the year ending April 2013, reveal it made a £2.5m profit, the Mirror reports. The tax bill is based on 23% of his earnings.
His tweeted apology at the time read: “I met with a financial adviser and he said, ‘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.”
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The ATT had previously expressed concern that the legislation was overly complex and created unnecessary complications within the practical working of the new allowances
Introduced in 2013 to encourage R&D investment, the scheme allows UK businesses to pay only 10% corporation tax on profits derived from any UK or certain EU patents
Yet, KPMG’s annual survey shows that the UK is still an attractive place to do business, despite falling in rankings in tax competitiveness and FDI appeal
Following recent issues with HMRC’s personal tax computation software, Brian Palmer of the AAT questions whether the government’s implementation timeframe for Making Tax Digital is realistic