A Times newspaper investigation has exposed a tax avoidance scheme that annually shields £168 million from HMRC and includes amongst its clients, the comedian Jimmy Carr.
The K2 scheme is provided by Peak Performance Accountants and works by transferring salaries into a Jersey based trust which then lends money back to investors. Technically, the loan can be recalled which allows the income to escape income tax. The 1,100 clients using this scheme pay as little as 1% income tax, according to the Times investigation.
Whilst confirming that the celebrity comic and TV presenter, Jimmy Carr, is a beneficiary of the scheme, his lawyers have denied their client is involved in anything illegal and that the arrangement had been disclosed to HMRC.
The Times reported that the K2 scheme has enabled Carr to keep £3.3 million from the clutches of the Revenue.
Roy Lyness of Peak Performance Accountants told an undercover reporter, “It's like a satnav. I'm driving to Manchester, get a message saying there's a smash at Stoke, press this button to re-route. The Revenue closes one scheme, we find another way round it.”
Following this year’s Budget that signalled a get tough approach on aggressive tax avoidance, Lyness announced to his clients, “We're delighted to inform you that most of the powerful tax saving opportunities survived unscathed.”
It is this type of brazen attitude towards aggressive tax avoidance displayed by the likes of Lyness and others that enrages the Government and will make them more determined to stamp out artificial schemes by way of a GAAR (general anti-abuse rule), which is currently being consulted on.
Source: contractor weekly
The K2 scheme is provided by Peak Performance Accountants and works by transferring salaries into a Jersey based trust which then lends money back to investors. Technically, the loan can be recalled which allows the income to escape income tax. The 1,100 clients using this scheme pay as little as 1% income tax, according to the Times investigation.
Whilst confirming that the celebrity comic and TV presenter, Jimmy Carr, is a beneficiary of the scheme, his lawyers have denied their client is involved in anything illegal and that the arrangement had been disclosed to HMRC.
The Times reported that the K2 scheme has enabled Carr to keep £3.3 million from the clutches of the Revenue.
Roy Lyness of Peak Performance Accountants told an undercover reporter, “It's like a satnav. I'm driving to Manchester, get a message saying there's a smash at Stoke, press this button to re-route. The Revenue closes one scheme, we find another way round it.”
Following this year’s Budget that signalled a get tough approach on aggressive tax avoidance, Lyness announced to his clients, “We're delighted to inform you that most of the powerful tax saving opportunities survived unscathed.”
It is this type of brazen attitude towards aggressive tax avoidance displayed by the likes of Lyness and others that enrages the Government and will make them more determined to stamp out artificial schemes by way of a GAAR (general anti-abuse rule), which is currently being consulted on.
Source: contractor weekly
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