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David Cameron has criticised the comedian Jimmy Carr, describing him as "morally wrong" for seeking to avoid taxes.
Media reports of Carr's financial arrangements suggest "straightforward tax avoidance", said the prime minister, and it was unfair on the people who pay to watch him perform that he is not paying his taxes in the same way that they do.
Cameron said he had not had time to look at allegations relating to singer Gary Barlow, who was given an OBE in the Queen's birthday honours list.
Speaking to ITV in a round of TV interviews during his trip to Mexico, the prime minister 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. 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 hardworking people who do the right thing and pay their taxes to see these sorts of scams taking place."
Carr, who has lampooned bankers for failing to pay their tax, reportedly protects £3.3m a year by channelling cash through Jersey-based company K2, which then returns the money in the form of a loan. This is not subject to income tax.
The comedian defended his financial affairs on Tuesday, telling an audience: "I pay what I have to and not a penny more."
The Channel 4 standup is reported to have used a legal tax-avoidance scheme that enables members to pay income tax rates as low as 1%.
He spoke out amid claims that members of Take That – Gary Barlow, Howard Donald, Mark Owen and the band's manager, Jonathan Wild – invested at least £26m in another scheme run by Icebreaker Management Services.
Earlier, a Downing Street spokeswoman had said Cameron backed George Osborne's description of aggressive tax avoidance as "morally repugnant".
Asked if Cameron was "disappointed" about the reports of the tax affairs of Barlow, who was made an OBE in the Queen's birthday honours at the weekend and campaigned alongside the Tory leader at the general election, she said: "I just go back to the general point about tax, that everybody should pay the right level of tax.
"Separately, the jubilee celebrations were a great success and Gary Barlow played a big part in that."
Asked if the government might consider whether the tax affairs of individuals should be a factor when considering people for honours, she said: "I am not going to comment on individuals in terms of what's happening in a newspaper report."
Later, another Downing street source appeared to harden the government's position on celebrities' tax affairs, and said: "All tax avoidance schemes need to be addressed by HMRC [HM Revenue & Customs] whichever big-name stars are involved."
Separately, No 10 sources stressed that a general tax avoidance rule, due to come in next year is the best way of handling these kind of tax loopholes, rather than constantly chasing down every individual tax scheme.
Carr was confronted over his financial arrangements during a show in Tunbridge Wells, in Kent.
Challenged by a member of the audience, who told him: "You don't pay tax", he replied: "I pay what I have to and not a penny more,", the Times reported.
It came after he appeared to make light of the furore surrounding his tax payments.
He asked: "Got through the papers? I haven't really been through the papers today. The Murdochs are after me …"
Carr is said to be one of more than 1,000 beneficiaries who shelter £168m from the taxman each year using K2.
Barlow, Donald, Owen and Wild are among almost 1,000 people who contributed £480m to 62 partnerships in music industry investment schemes, the Times reported.
An HMRC spokesman said it had successfully challenged an avoidance scheme run by Icebreaker LLP, winning on the main arguments in the tribunals.
The spokesman said: "We are now preparing to litigate Icebreaker 2 but for legal reasons cannot say more at this time. We examine the implementation of avoidance schemes in detail and will not let any aspect of these cases go unchallenged."
HMRC said the K2 scheme was already under investigation.
The spokesman added: "We have taken firm action to protect the exchequer from unacceptable tax loss.
"We do not accept that the Icebreaker tax avoidance schemes have the tax effects their promoters claim – we have already successfully challenged one Icebreaker scheme in the tribunal."
HMRC could not confirm whether or not members of Take That and their manager had been involved in an Icebreaker 2 scheme.
Writing in the Sun, the Treasury chief secretary, Danny Alexander, warned stars and others who employ "ever more obscure and underhand" avoidance measures
"No matter how rich or famous you are, we are coming to get you," he wrote.
"When it comes to paying their fair share, some of the people who can afford it most think they can get away with paying the least.
"Frankly, I think people who dodge the tax system are the moral equivalent of benefit cheats. Both sets of people think they can bend the rules everyone else lives by for their own benefit," he wrote.
A spokesman for Icebreaker Management Services Limited said the LLPs [limited liability partnerships] were commercial businesses, in which the LLP members worked actively together in order to produce creative and artistic material and generate taxable profits.
"As a result, hundreds of people have been, and can continue to be, employed in the creative industries and large numbers of products have been made for distribution and sale around the world.
"We believe that the Icebreaker LLPs play a valuable part in the UK economy, frequently fostering and supporting creative talent and young people embarking on their careers.
Icebreaker Management Services Limited recognises the need for the proper administration and collection of taxes but that its partnerships were legitimate commercial enterprises which generate taxable profits., and that it is essential that anyone who seeks to make use of tax relief does so properly and within the law.
"Abuse of the tax system for personal gain is, of course, never acceptable," the spokesman said.
Catherine McKinnell MP, the shadow exchequer secretary to the Treasury, said: "Tax avoidance must be clamped down on, especially at a time when families, pensioners and businesses who pay their fair share are feeling the brunt of the double-dip recession.
"But this week's revelations show that, for all their tough talk, the government is failing to tackle the problem. Cutting the resources of HMRC too far and too fast will make it even harder for the government to stay ahead of clever accountants.
"And at the same time as they are failing to tackle tax avoidance. David Cameron and George Osborne are actually cutting taxes for millionaires while asking millions of families and pensioners to pay more."
Fresh tax questions emerge
Tax questions have also dogged a number of Tory donors and advisers:
1 A mobile phone company that has paid no corporation tax for three years has become the Conservatives' most generous corporate donor after giving more than £300,000 over the last nine months.
Lycamobile, an £88m company based in Canary Wharf, gave more than £130,000 between January and March this year, the latest Electoral Commission records show. The company says it has paid all tax owing and has re-invested its profits.
2 Lord Ashcroft, the Tories' former treasurer who has given more than £10m to the party, revealed in 2010 that he was "non-domiciled", meaning he did not pay UK tax on earnings made outside Britain. When he was made a peer in 2001, at the behest of the then Tory leader William Hague, he gave assurances that he would take up permanent residence in the UK. Ashcroft insists that he has behaved properly and has paid all taxes due.
3 Sir Philip Green, the Topshop billionaire who was appointed as a government adviser in 2010, has been accused of avoiding a personal tax bill of £300m. Green's family banked one of the biggest pay cheques in corporate history in 2005 when his Arcadia fashion business, which owns Topshop, paid a £1.2bn dividend. The record-breaking payment was made to his wife, Tina, who lives in Monaco and is the direct owner of Arcadia. As a result, no UK income tax was due. He says criticism of this is outrageous and says he has paid "tens of millions" in tax to Britain.
4 An unnamed Tory donor avoided tax by flying outside UK airspace on his private jet at night, a lobbyist claimed in April. The millionaire is said to have routinely flown out of Luton airport in the evening so he could sleep on his jet.
Because he was outside British jurisdiction at night, this allowed him to extend the number of days he could stay in the UK without paying tax. As a non-resident, he could spend just 91 full days in the country each year. The arrangement was revealed to undercover reporters by Sarah Southern, the lobbyist at the centre of the recent cash-for-Cameron scandal.
Comments
20 June 2012 4:54PM
Cameron needs to look closer to home for his moral indignation.
20 June 2012 4:54PM
David Cameron calling someone "morally wrong" is a bit like Jimmy Carr calling someone "unfunny".
20 June 2012 4:54PM
To the tower!
Of with his head I say!
20 June 2012 4:54PM
If it's so wrong, then why is it legal? Surely it's just a case of the Treasury changing the rules. I don't get how politicians of all parties can moralise about this when they have allowed it to happen.
20 June 2012 4:55PM
Pot calls kettle black!
Cameron really is a cheeky bastard!
20 June 2012 4:56PM
Pot calling the kettle black !
20 June 2012 4:56PM
That's a bit fucking rich from old plum face- or has he forgotten already his own '' dodgy'' appearance last week at the Levenson Inquiry?
Of course the odd 8.6 Billion quid and freedom of choice over broadcasting have no place when compared to the little fish like Jimmy!?
20 June 2012 4:56PM
Makes most of his material on 10 O'Clock Live look pretty hypocritical now
20 June 2012 4:56PM
Good for you Jimmy, I'd do exactly the same thing if I could.
As for Cameron calling someone else 'morally wrong'...
20 June 2012 4:56PM
Pot and Kettle?
20 June 2012 4:56PM
"Jimmy Carr is morally wrong"
We've all known this for a while now.
His tax arrangements sound a bit dodgy as well.
20 June 2012 4:56PM
Cameron is practically welcoming press to look at those of all his mates & Tory donors.
20 June 2012 4:57PM
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20 June 2012 4:57PM
Off, I mean.
Damn I can't spell.
20 June 2012 4:58PM
How much tax is Carr supposed to be avoiding? How does it compare to what Philip Green of Topshop is accused of avoiding? How does it compare to Vodafone being let off £6 billion in a "golden handshake" by Dave Hartnett of HMRC?
Does Cameron comment on all tax avoidance cases or only those that are convenient?
20 June 2012 4:58PM
...... and maybe Jimmy Carr is responsible for workfare...............
or is that you "DAVE"...
20 June 2012 4:59PM
Didn't the government turn away from a general anti-avoidance rule?
Cameron lecturing anyone on morality is absurd. No problem with someone bashing tax avoiders, but probably not someone whose party is 50% funded by banks, who benefit more than anyone from taxpayer largesse and a failure of government leadership.
20 June 2012 4:59PM
I thought Carr was meant to be the comedian?
20 June 2012 4:59PM
Personally, I think it is morally repugnant for Cameron to condemn the tax arrangements of individuals where he doesn't really know the facts, simply to get a lift in the polls.
Condemning tax avoidance scheme generally is fine, but singling people out in this way is not really appropriate.
20 June 2012 4:59PM
And he 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.
I think that it is unfair for the people of this country to have a Chancellor with a multi-million off shore trust fund and a Prime Minister who's father actively exploited every loop hole going to avoid tax for his wealthy clients
Physician heal thyself
20 June 2012 4:59PM
But then Cameron wouldn't want to look to closely into Gary Barlow's tax affairs as Mr Barlow is a strong public supporter of the Govt.. And the PM wouldn't want to upset him.
As for Carr... he's an easy target as anyone with any decency thinks he's an obnoxious arsehole.
20 June 2012 4:59PM
I have never been sure that cameron knew and understood what moral meant, now I know he has no idea at all.
20 June 2012 5:01PM
Went to the wrong school to get away with it, did he?
20 June 2012 5:01PM
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20 June 2012 5:01PM
See the problem is Mr Cameron, after your Leveson performance where you couldn't remember anything, nobody believes a word you say. As Prime Minister, that creates a rather sticky impasse where perception becomes truth. Let me spell it out:
YOU. HAVE. NO. MORAL. AUTHORITY.
20 June 2012 5:01PM
Delighted to see that below this article, there's an advert for Barclays Wealth offering "a choice of offshore locations" - is that perfect media buying, or very bad?
20 June 2012 5:02PM
Shagging someone else when you are in a relationship/marriage is morally wrong too - but it's not illegal either.
20 June 2012 5:02PM
Pot and Kettle
Kettle and Pot
The words Black, kettle, pot and calling.....
Possibly the most overused idiom on comments boards.
20 June 2012 5:02PM
Cameron can't really take a moral stand on this when most of his friends do the same thing.
20 June 2012 5:03PM
Taxation is 'morally wrong', rather than anyone who tries to find ways of not having their property rights violated. It's a violation of the non-aggression principal and would be considered theft and extorsion if carried out by anyone other than the state (with is no more than a bunch of men and women).
20 June 2012 5:03PM
Advised by an accountant or not, surely a man of Jimmy Carr's intellect knows that paying a peppercorn amount of tax is going to make people fucking angry and is morally repugnant.
In an age of MP's expense scandals, austerity measures and intense media scrutiny, why is it that some rich people think they have the right to do whatever the hell they like.
I've seen a load of comedians come out and defend Jimmy, saying that he does a lot of good work for charity etc - fine. But it stinks that he's committed to cheating HMRC out of so much money and he should bloody well know better.
Now everything swipe he has ever said about bankers on 10 o'clock live is a big hypocritical turd coming atcha from your TV.
20 June 2012 5:03PM
You're definitely fucked when Dave tells you he holds the moral high ground.
20 June 2012 5:03PM
Who inherited Cameron Snr's offshore stash? I think we should be told.
20 June 2012 5:03PM
so Danny Alexander says ...
,"
Fair enough. It also applies to millionaire MPs who cheat the expenses system, like the last bloke who had your job before you did Danny, you know, David Laws, the one the Guardian thinks should be back in the cabinet.
20 June 2012 5:04PM
*cough* VODAPHONE *cough*
Whatever tax Carr is legally avoiding is a drop in ocean compared to the amount the government is allowing Vodaphone to avoid.
I've heard/read about more people saying 'No problem' with what Carr is doing than saying how wrong he is.
And the money he earns is all through his own work...he writes the gags, he performs them...I left a gig after 1am last year after he put on two gigs on one night due to demand...he looked knackered at the end but he delivered the goods.
20 June 2012 5:04PM
So change the currency laws , and render it all illegal ...
Reinforce , and enforce full payment of all owed taxes.
It happened several times to all the low and normal income people in the country when private sector software caused the HMRC PAYE system to meltdown .
Until then maybe Cameron should read this, then embrace his hypocrisy..
http://www.guardian.co.uk/politics/2012/apr/20/cameron-family-tax-havens
and always remember Osborne doesn't pay higher rate tax.
How the hell not. He earns 135k and rents out a house in an area where 20k a MONTH is normal for that type of property.
I am still curious as to how he manages to dodge upper rate tax.
Incompetence or avoidance ?
20 June 2012 5:05PM
It's just not funny Mr Carr,a bit like you really.
20 June 2012 5:05PM
It's a sort of poetry.
20 June 2012 5:05PM
This Cameron bloke sounds like some sort of Socialist!
20 June 2012 5:06PM
The Government really need to get away from this ridiculous situation where the laws are pored over for loopholes by tax lawyers which are then closed off, by Government lawyers, creating another loop-hole in the process and then argued over in court often hinging on the meaning of one word, and move more to INTENT of the law as a means of deciding how to deal with the situation. If the intent is aggressive evasion that should be enough to take action whatever the letter of the law, ie it may be literally legal but its clearly evasive and wrong. This is the basis of European laws in any case. Also does no one in HMRC look at how much celebrities are paying and think to themselves "shomething wrong here shurely?" and send a bill. If it wasn't for PAYE the system would collapse and resources need to be allocated accordingly.
20 June 2012 5:06PM
a conversation about tax avoidance and Cameron is taking the high ground? Perhaps its time he saw the same disgust with his peers and associates?
20 June 2012 5:06PM
Now, let's just see how far the joined-up thinking goes on this matter, shall we?
Oh, look, we already have.
20 June 2012 5:07PM
EXCUSE ME???
This from David Cameron, whose father ran a company deliberately designed to avoid taxation on investments?
20 June 2012 5:07PM
Uncomfortable truth: If a government does not demonstrate any semblance of genuine democratic legitimacy - and therefore any mandate - it is far from clear that such a government can demonstrate any entitlement to tax receipts.
20 June 2012 5:07PM
I wonder how how the Jimmy Carr Tour next year will do? He is pretty quite on the Twitter front.
Oh, and Dave should know about being "morally wrong", Coulson & Brooks told him all about it.
20 June 2012 5:08PM
Well i'll be seeing him this Friday and it won't make a jot of difference.
Unlike the bankers who gamble with other people's money and when they fuck up the government bails them out Carr will only be as good as his last tour...and based on his last tour he'll be going for sometime yet.
20 June 2012 5:08PM
...and neither does it affect the budget! See how that works?
20 June 2012 5:09PM
reported to have used a legal tax-avoidance scheme which enables members to pay income tax rates as low as 1%
WHY is this legal????
20 June 2012 5:09PM
Jimmy Carr is not the problem. the problem is that the British government contiunes to run the tax havens of Jersey and the Caiman Islands. Cameroon could shut down these tax havens, but of course he wont because his purpose in life is to support the captalists and help them avoid taxes.
20 June 2012 5:09PM
What's wrong with legal tax avoidance? I have been using it from day one and I don't feel like I am stealing from someone. It helps me to live better, nothing more.
If it's wrong the parliament is there for issues like this. But I doubt they will do anything about this...