Carr C(r)ash

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Last week David Cameron picked out Jimmy Carr as one of 1000 people using the K2 tax scheme by branding Carr’s tax arrangement as “morally wrong”. The K2 scheme is based in Jersey and is understood to protect £168m from HMRC every year, with Carr as its largest beneficiary. HMRC is now investigating the scheme but there is no suggestion that the comedian’s actions are illegal. Is Cameron right? Is tax avoidance morally wrong?

Jimmy Carr made the following statement on Twitter after Cameron’s revelation:

I appreciate as a comedian, people will expect me to ‘make light’ of this situation, but I’m not going to in this statement as this is obviously a serious matter. I met with a financial advisor and he said to me “Do you want to pay less tax? It’s totally legal”. I said “Yes”. I now realise I’ve made a terrible error of judgement. Although I’ve been advised the K2 tax scheme is entirely legal, and has been fully disclosed to HMRC, I’m no longer involved in it and will in future conduct my financial affairs much more responsibly. Apologies to everyone.

I think that although people have been very quick to judge Carr, many would find it difficult to resist such a scheme if their accountant offered it to them. Carr let the panelists on 8 Out Of 10 Cats mock his predicament and did so with good humour.

I would argue that we should not blame people like Jimmy Carr – most people would pay less tax if they could. It is the system that should be blamed for allowing legal loopholes to develop. Having said that, if the K2 scheme is shut down, no doubt another scheme will pop up exploiting a different loophole.

It also emerged this week that Gary Barlow and two other members of Take That have invested over £26m in a music industry investment scheme believed to be another way of avoiding tax. However their lawyers have stated that they still pay a significant amount of tax. Again, the scheme they are involved with is totally legal.

Although I said that we should not blame these individuals it is disappointing that Gary Barlow, who has been greasing round the Royal Family in recent months, is avoiding paying the tax that pays for the monarchy. Jimmy Carr also took part in the Diamond Jubilee Concert.

I think Cameron went a bit far saying that what Carr did was immoral. He is on dodgy ground because many Tory party donors are involved in similar schemes. His and George Osborne’s priority now should be to close up these loopholes so these schemes are no longer a legal option.

HLAD

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15 thoughts on “Carr C(r)ash

  1. I’m bemused at the almost impassive nature in which the Jimmy Carr story passed. Yet when it comes to a manipulation and exploitation of the Welfare system and we’re quickly in uproar and labelling vast swaves of individuals as “work-shy” or “lazy scroungers” when what they are also doing is also completely legal (though I certainly don’t condone it).

    We need some perspective here. We lose at tops about £5 billion from Welfare fraud, etc (rough estimate here). Yet we lose some £85 billion through tax avoidance and evasion. To say what Carr and the members of Take That are doing with “I think Cameron went a bit far saying that what Carr did was immoral.” is outright ludicrous. Of course it’s immoral in the same way manipulation and exploitation of the Welfare system is immoral. The difference being is that the former is a far far bigger problem.

    • I don’t think that taking advantage of a benefit/welfare system that is too easy to get money from is immoral if it’s not illegal. I have to admit I’ve taken advantage of it myself. Morality is different from doing the decent thing.

  2. You’re thinking and applying morality on a far too grand a scale. Morality is applicable at all levels of life however mundane. If you take something that isn’t yours by exploitation and not pay your fair share with both being motivated by selfishness, it’s immoral at any level, regardless of what the law says and regardless of how small the matter may be.

    • Like I said, and you re-affirmed. The legality of something has absolutely no bearing on morality. But with what you’re saying just there, the expenses scandal wasn’t immoral then?

      • So when the slave trade was legal we didn’t blame the people we blamed the system (well at the time we didn’t blame anyone but that’s besides the point). We just said the people were being “selfish”. No of course not, we find fault with both. I know this is an extreme example but the point still stands. Systems may allow immoral acts to flourish (and we should shut down systems that allow that) but someone who takes part in said system still makes the conscious decision to commit the immoral act.

        That’s the thing with morality, it transcends laws and systems. While systems may permit moral acts, it’s the individuals who the consciously commit those immoral acts. Trying to justify individuals actions by brushing them aside as “oh well, but it’s legal” just defeats the whole object of consistently applied morality.

  3. Firstly, the slave trade is completely different. It involved harming and mistreating human beings.

    Secondly, you are still ignoring the fact that I don’t believe these tax schemes or MPs expenses to be immoral. The systems are open to abuse but taking advantage of said system to get/keep more money isn’t immoral in my opinion.

  4. Firstly, I did actually concede that it was an extreme example. But you don’t think the untaxed money through tax evasion and avoidance (roughly £85 billion) could not help society and those most suffering in society greatly? So the fact that this is going untaxed is doing great indirect harm to many many individuals. So the point still stands.

    In regards to your second point. With no disrespect intended here, but the fact that you find that “taking advantage of said system to get/keep more money isn’t immoral in my opinion.” is a little bit worrying. Brushing individual’s actions aside simply because the system is already open to abuse and that said system is legal making it ok, doesn’t give me much hope for humanity.

    • That I can agree on, everyone who is involved with tax avoidance and evasion schemes should be brought into the public eye as best as we can. However, the media has other ideas and some individuals are far better at hiding their tax receipts better than others.

  5. But Max, where do you draw the line? Choosing a ready meal instead of getting a take away is a form of tax avoidance. Is this immoral? Am I denying poor children in Sure Start centres their fair share by not going to the chippy?:

    “…the fact that this is going untaxed is doing great indirect harm to many many individuals. So the point still stands.”

    Perhaps we are all guilty.

    All our decisions, no matter how tiny, will in some way or another have a moral component. I think we need to distinguish between someone being self-interested and someone being selfish. All of us have money in our wallets that we have not given to charity. Some of the more pious members of society might wish to castigate us for our selfishness.

    The tax system is not a system of charity collection, and any party that suggests that its effectiveness should rest on the milk of human kindness deserves more castigation than a comedian who just wants to pay less.

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