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.”
Image credit: Shutterstock/Featureflash
Freelancers and micro-businesses still need more information about the government’s plans to make tax digital
The government is pressing ahead with changes to the way it taxes individuals with a foreign domicile
I will feel slightly awkward when I write to the client who is about to receive a large invoice from the PAYE expert, offering him the fee protection going forward
IHT take up 17% in just a year as more estates pass tax threshold