Jimmy Carr today admitted he had ‘made a terrible error of judgment’ by using an off-shore scheme to pay as little as 1 per cent income tax as it emerged he paid cash for his £8.5million home.
The comedian said he is no longer involved in the controversial ‘tax avoidance’ scheme after Prime Minister David Cameron branded his conduct ‘morally wrong’.
Carr, who has publicly mocked tax avoidance schemes, is believed to be the largest beneficiary of a Jersey-based accountancy arrangement said to shelter £168million a year from the taxman.
He puts away £3.3million a year via the K2 tax scheme, which is used by more than 1,000 tax avoiders, it was claimed.
K2 works by transferring salaries into a Jersey-based trust, which lends investors back the money. Because the loan can technically be recalled, it is not subject to income tax.