guardian.co.uk,
Jamie Doward and Caroline Mortimer , Saturday 23 June 2012
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| Comedian Jimmy Carr is said to have used an aggressive - but legal - tax-avoidance scheme. Photograph: Yui Mok/PA |
Poor Jimmy
Carr. If the comedian who likes to joke that he is "literally the biggest
face in television" had not been so famous he would not be making headlines
for all the wrong reasons.
And if a
promoter of K2, one of the tax avoidance schemes Carr had signed up to, had not
boasted about the comic's involvement to undercover reporters, his financial
affairs, and those of many others, would have remained secret.
So, too,
would the strange story of how a consultancy that devised another of Carr's tax
shelters sought Tory support for a campaign that tried to turn tax avoidance
into a human rights issue.
Records at
Companies House show Carr was once one of 518 directors of Romangate, a company
set up in 2009 to facilitate what at the time was believed to be a legitimate
tax avoidance scheme.
Other
directors included Coronation Street star William Roache, footballer Chris
Sutton and Coleen Nolan, until recently a presenter on ITV's Loose Women.
Stephen Lambert, the television producer behind hits such as Secret
Millionaire, was also a director.
The
majority of Romangate's directors, all of whom have now resigned, were contract
workers and foreign nationals. A vast number were doctors, dentists, bankers,
accountants, engineers and oil traders. One listed his profession as a
watchmaker while another said he was a butcher. The aristocracy was represented
by the socialite Lady Rona Delves Broughton and Lady Caroline Harrowby, an
interior designer.
Romangate
was part of a tax avoidance strategy called Rushmore that was closed down in
2009 without any financial benefit to its members amid claims in parliament
that it could end up depriving the Exchequer of £200m. Introducing legislation
to close the scheme down, the Labour Treasury secretary, Stephen Timms,
explained: "We are preventing exploitation of the tax system by the
schemes of a small number of wealthy people. Honest taxpayers rightly expect
the government to identify such schemes quickly and block them
effectively."
The diverse
backgrounds of those who sought to benefit from the strategy suggests tax
avoidance trusts are not simply vehicles for the super-rich. Romangate, which
is owned by a Jersey trust called Plectron, is just one of a range of companies
founded by financial consultants Matthew Jenner and Anthony Mehigan to help a
multitude of clients avoid tax.
The two
men, who declined to return calls from the Observer, run a tax consultancy
called NT Advisors that lists an office in London's West End. The consultancy
was behind a major lobbying campaign to wreck aspects of the previous
government's 2008 Finance Act, which closed a number of tax loopholes.
NT Advisors
hired a lobbying firm, the Whitehouse Consultancy, and briefed officials and
politicians to press for parts of the bill to be dropped, arguing it would
unfairly affect 600 individuals who benefited from legitimate tax avoidance
schemes. "The introduction by stealth of retrospective legislation is an
affront to the democratic process and seriously undermines the reputation of
the UK as a good place to do business," Mehigan declared at the time.
NT Advisors
wrote to politicians threatening to seek a judicial review of the act which
they claimed breached Article 1 of the European Convention on Human Rights, the
right to peaceful enjoyment of possessions.
In June
2009, the Tories tabled an amendment to prevent a retrospective clause of the
act being extended. David Gauke, the Treasury minister, declared "the
risks of retrospective legislation are very considerable" because "it
damages stability and certainty in the UK tax system". The Tories' opposition
delighted NT Advisors .
Gauke
confirmed to the Observer: "We tabled an amendment on the retrospective
element of this clause which closed down an avoidance scheme" but he
stressed it was simply a parliamentary manoeuvre to gain clarification. He said
the Tories had "enthusiastically supported" the Labour government's
efforts to close tax avoidance schemes and the amendment was never pushed to a
vote.
A campaign
to overturn the retrospective elements of the act continues with some of the
affected claiming financial hardship as a result of its introduction. But their
cause will not have been helped by the revelation that among their ranks were a
multi-millionaire comic, TV stars, City traders and super wealthy financiers.
Financial
expert Richard Murphy said Carr's travails had catapulted the issue of tax
avoidance to the top of the political agenda. "The public mood is moving
against tax avoidance," Murphy said. "People really do want every one
to be in this together."
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David
Cameron, who attacked Jimmy Carr's use of tax
avoidance schemes, faces new
questions over his
position on the issue. Photograph: Stefan Rousseau/PA
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