THE Scottish firm behind comedian Jimmy Carr's notorious but legal tax avoidance scheme is to be probed by one of the country's oldest professional bodies.
The Institute of Chartered Accountants of Scotland (ICAS) has confirmed it is "looking into the scheme" Perth-based Peak Performance and the Jersey-based initiative that allows the rich to pay as little as 1% income tax. It is also drawing up "ethical guidelines" for accountancy firms on tax planning and avoidance.
It was revealed last month that Carr was squirreling away £3.3m a year through the "K2" scheme, by which salaries are transferred through a Jersey trust and the cash loaned back to the investor. The loan is not then subject to income tax. David Cameron has condemned the scheme, used by about 1100 tax avoiders, as "morally wrong".
The company running K2, Peak Performance Accountants, was based in Kirkcaldy until last month, when its registered address was changed to Perth. Among its five shareholders are chartered accountant and ICAS member David Gill and Roy Lyness, the businessman who was caught on tape boasting about K2 and how it benefited the wealthy.
Lyness was quoted saying of HMRC's efforts to close tax loopholes: "It's a game of cat and mouse. The Revenue closes one scheme, we find another way round it. It's like a sat-nav. I'm driving to Manchester, get a message saying there's a smash at Stoke, press this button to re-route. That's all we do with tax avoidance. The Revenue puts a block in, we just go round the block."
The revelations have prompted ICAS, which upholds the "integrity and standing of the profession of chartered accountancy", to probe the scheme and the firm running it.
The body has also set up a taskforce to produce a set of principles for accountants on tax avoidance. As the industry's professional body, ICAS can launch investigations into members and expel them from the institute. It has also urged the UK Government to push through a proposed "General Anti-Avoidance Rule".
Cathy Jamieson, Scottish Labour's Treasury spokesperson, said: "People are rightly outraged when they see people avoiding paying their fair share of tax and I welcome these steps within the industry to crack down on these schemes. Rather than criticising some individuals, and then refusing to comment on others closer to home, David Cameron and George Osborne should be doing much more to crack down on tax avoidance."
A spokesperson for ICAS said: "It is time for the Government, HMRC and the professional bodies to bring forward better tax legislation.
"In the interim - ICAS has decided to draw up a set of principles and ethical guidelines for our firms on tax avoidance schemes and appropriate tax planning."
Of the firm behind K2, the spokesperson said: "We are aware of Peak Performance and are looking into the situation."
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article