Carr admits 'error' over taxes

David Cameron has defended wading into the row over Jimmy Carr's tax affairs after the comedian admitted he had made a "terrible error of judgment".

But the Prime Minister declined to criticise Take That singer Gary Barlow, who has also been accused of using a complex scheme to avoid paying millions of pounds to HM Revenue & Customs.

Carr bowed to pressure by releasing a statement apologising for his actions.

"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," he said.

"I met with a financial adviser 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 judgment.

"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."

Speaking to ITV News during a visit to Mexico, Mr Cameron joined a chorus of criticism of the comedian, whose tax arrangements were disclosed in The Times on Tuesday.

Describing them as "straightforward tax avoidance", the PM said it was unfair on the people who pay to watch the comic perform that he is not paying his taxes in the same way that they do.

He said: "I think some of these schemes - and I think particularly of the Jimmy Carr scheme - I have had time to read about and I just think this is completely wrong."

It has been alleged that Take That stars Barlow, Howard Donald and Mark Owen, and the band's manager Jonathan Wild, invested at least £26 million in a scheme run by Icebreaker Management Services - which says it works within the law.

But Mr Cameron refused to criticise Barlow, who recently received an OBE.

"I am not going to give a running commentary on different people's tax affairs. I don't think that would be right," the premier said at a press conference in Downing Street.

"I made an exception yesterday because it was a very specific case where the details seemed to have been published and it was a particularly egregious example of an avoidance scheme that seemed to me to be wrong and I made that point."

Mr Cameron said the "rules of the road" on tax were clear.

"In terms of people's tax affairs, as I said yesterday, of course people can plan their tax affairs, put money into their pension and that can have an effect on your tax bill and the rest of it. That is sensible and reasonable. But as the Chancellor of the Exchequer said, some of these aggressive anti-avoidance schemes that may not be illegal are morally questionable.

"I think it is right not only for politicians to make that point but frankly to go after some of the aggressive avoidance schemes.

"It isn't right at a time of economic difficulty to have these very aggressive anti-avoidance schemes in existence."

But shadow leader of the house Angela Eagle questioned Mr Cameron's decision to speak out about Carr's tax arrangements while remaining silent about those of other high profile figures.

She said: "Oddly, (Mr Cameron) did not take the opportunity to condemn as morally repugnant the tax avoidance scheme used by Conservative supporter Gary Barlow, who has given a whole new meaning to the phrase Take That.

"If he is also morally repugnant, why has he been given an OBE in the Birthday Honours?

"Why is the Prime Minister's view of what's dodgy in the tax system so partial? Sir Philip Green has interesting tax arrangements but far from being labelled morally repugnant in a Mexico TV studio, he has got a Government review to head up."

Carr is filming an episode of the Channel 4 panel show 8 out of 10 Cats tonight and said it was "business as usual", but admitted he expected to be targeted by his fellow panellists over the scandal.

He tweeted: "I've dished it out enough times let's see if I can take it."