Backlash over PM's 'mistake' as Jimmy Carr tax story spirals

David Cameron

Major Tory donor was co-director of tax scheme, alongside shamed comic Jimmy Carr

BY David Cairns LAST UPDATED AT 09:22 ON Sun 24 Jun 2012

DAVID CAMERON is facing the fall-out from his controversial decision to publicly criticise comedian Jimmy Carr as "morally wrong" for using a legal tax avoidance scheme.

The Observer reports that one of the party's top donors was co-director of a tax avoidance scheme with Carr. "The Prime Minister made a mistake," says an "influential accountant" quoted in The Sunday Telegraph meanwhile, which reports criticism of the PM for singling Carr out in a prominent article.

Observer journalists have been busy combing the financial records at Companies House for a story which, the paper says, "is intensely embarrassing for David Cameron".

George Robinson – not to be confused with Labour's embarrassing 1990s paymaster-general Geoffrey Robinson – is one of the Conservatives' biggest donors, a hedge-fund manager who has given the party more than £250,000.

According to the Observer, he and Carr were among the 500 co-directors of a tax avoidance scheme – not the K2 scheme which prompted Carr to make a fulsome public apology, but a different scheme called 'Rushmore'.

Robinson was listed as a director of a company called 'Romangate' for the 12 months leading up to January 21, 2010. Sadly for those involved, the scheme was closed down after an investigation by HMRC before any of its members could claim any tax relief.

The paper says the then-treasury secretary, Stephen Timms, called the scheme a "highly abusive, completely contrived arrangement … set up with the sole aim of avoiding paying the tax due to the Exchequer".

If Cameron should have recalled the old adage about those who live in glass houses before dubbing Carr "morally wrong", the Telegraph seems to think he has been smashing his own windows, reporting that top tax experts and "influential accountants" are furious with the PM.

The Tory-supporting paper says there is concern in financial circles that his criticism of Carr may cause wealthy individuals to take their business elsewhere than the UK.

"The Prime Minister made a mistake and I don’t think he will do this again," says one unidentified source. "There is a genuine danger that if ministers name and shame wealthy people in this way these wealth creators will leave this country or not bother coming here."

The Telegraph adds that accountants "now fear a 'witch hunt' for anybody who has legally avoided tax"; The Sunday Times carries a wide-ranging follow-up to its original piece about Carr last weekend accusing "Olympic architects, a BBC presenter and the England football captain" of having "arrangements under which they could have reduced their personal tax rate from 50 per cent to just two per cent".

The accusation is carefully-worded because while people including Zaha Hadid, Gary Lineker and Steven Gerrard borrowed large sums from firms of which they are directors, there is no reason to suppose that they took advantage of the two per cent tax rate available to them under a loophole.

A spokesman for Hadid told the paper she paid 3.5 per cent, not two. There was no comment from Lineker or Gerrard, who "could have saved" £224,000 and £169,000 respectively if using the scheme.

As for Carr, the Telegraph reports that at his live show in Stockport on Friday, one woman reacted to a joke about teachers' working hours by saying: "At least we pay our taxes." · 

Disqus - noscript

legal tax avoidance, this is what Britain looks from ouside
Michael Skoruppa, Germany, mskoruppa@gmx.de

This fool that has no common sense, cannot see any further than the end of his nose is actually running this country. No wonder we are in the mess we are in. He keeps claiming that the Tories have paid a quarter of the deficit if anyone cares to look up the deficit graph from the 1970s or any other date they will see that the Tories borrowed so much in their first year and half that they actually increased the deficit by at least one third and what they have paid off is what they borrowed since coming into office. Now without thinking of the consequences of his outburst about Jimmy Carr he is backing down because someone has pointed out to him the error of his ways. Whoever his advisers are they are certainly earning their money, trouble is they will take the brunt of Cameron's mistakes, just like Smith did in the Jeremy Hunt BSkyB business. I wonder what Cameron has to hide he was so adamant that there would be no enquiry, stinks of guilt.

We have a self obsessed,power hungry scumset manipulating the gullibility apathy and ignorance of the electorate for its own selfish ends, playing politics with the publics livelyhood, bring on Direct Democracy.

For further concise, balanced comment and analysis on the week's news, try The Week magazine. Subscribe today and get 6 issues completely free.