David Cameron tells Channel 4 News that tax avoidance schemes such those used by Jimmy Carr are not morally acceptable, as members of boy band Take That come under the spotlight for doing the same.
The popular comedian Jimmy Carr, who only last week performed for the Queen as part of the jubilee celebrations, was on Tuesday accused of having £3.3m sheltered from UK tax through a Jersey-based scheme.
Prime Minister David Cameron told Channel 4 News’ Political Editor Gary Gibbon that such aggressive tax avoidance schemes were not “morally right”.
“Frankly some of these schemes where people are parking huge amounts of money offshore and taking loans back to minimise their tax rates, it is not morally acceptable,” he said.
“Those people who work hard, who pay their taxes, and out of that post-tax income, save up to go and see Jimmy Carr – he’s taking that money and stuffing it into something where he doesn’t have to pay taxes. That is not fair. That is not right. It isn’t morally right.”
Mr Carr was heckled about the rate of tax he pays while doing a gig on Tuesday night, but answered: “I pay what I have to and not a penny more”.
Three members of Take That [pictured below] and their manager, Jonathan Wild, were on Wednesday accused of investing £26m in a scheme that HMRC said was used to avoid paying tax, according to an investigation by The Times newspaper.
Gary Barlow, who was last week awarded an OBE and helped arrange celebrations for the Queens Diamond Jubilee, and fellow band mates Mark Owen and Howard Donald are among 1,000 people who paid a total of £480m to 62 partnerships in music industry investment schemes that are used to shelter tax.
Officials from Revenue and Customs said that the partnerships set up by the company Icebreaker Management Services are designed specifically for tax avoidance.
The HMRC said it will try to close down the partnerships, known as Icebreaker 2, at a tribunal in November. If successful, the three members of the world’s most successful touring band will have to pay back millions.
George Osborne referred to these schemes as ‘morally repugnant’ so why isn’t he doing anything to stop them? The government should be clamping down on super-rich tax dodgers instead of cutting our vital public services. Tony Smith, UK Uncut
“This type of scheme will fail where there is circular borrowing which serves no economic purpose or which cannot, in fact, be used in a trade,”said a spokesman, who added that Revenue and Customs had already successfully challenged a previous avoidance scheme run by Icebreaker.
“We examine the implementation of avoidance schemes in detail and will not let any aspect of these cases go unchallenged.”
A spokesman for the Honours Committee declined to comment on Mr Barlow’s OBE award in light of the revelations about his tax arrangements.
Lawyers for Mr Barlow, Mr Owen, Mr Donald and Mr Wild told The Times that their clients paid significant tax and added that they had invested in legitimate commercial enterprises.
Icebreaker denied that its partnerships were designed to avoid tax, but were set up to allow investment in the music industry for profit. But Matt Hodson, who was working on behalf of Icebreaker, told an undercover reporter for The Times: “They’ve invested money into the Icebreaker partnership and therefore not paid the Revenue the tax. They don’t like paying the taxman.”
Danny Alexander, chief secretary to the Treasury, said that the government was investing £900m in more tax inspectors and was working hard to close tax loopholes.
“Every person who’s setting up a scheme with a clever lawyer or accountant to minimise their tax burden – what they’re actually saying is that everyone should pay a bit more tax, so they can get off with it,” he said. “If everyone paid the tax that they owe, then the majority of people in this country could see their tax bills fall.
The government has previously pledged to crack down on corporate and individual tax avoidance and George Osborne told the House of Commons: “I regard tax evasion, and indeed aggressive tax avoidance, as morally repugnant.”
Tony Smith from UK Uncut called on the HMRC to re-think its strategy for dealing with “tax dodgers”, but added more resources were needed to tackle this issue.
“George Osborne referred to these schemes as ‘morally repugnant’ so why isn’t he doing anything to stop them?,” he told Channel 4 News. “The government should be clamping down on super-rich tax dodgers instead of cutting our vital public services.”
As the #TaxThat hashtag soon took hold of Twitter, the @UKUncut account had slightly a different approach to the allegations, tweeting: ‘I want your tax, I want your tax, I want your tax for good!’