Richard Murphy, an accountant who writes the blog Tax Research UK, has said that the Government needs to use its common sense and root out people whose tax bill does not match their earnings. Commenting on Jimmy Carr's tax arrangement (which he has vowed to change) he said:
There is a mismatch between economic reality andthe way [income] is being taxed. When that happens the Revenue should be ableto say: we are going to ignore all the artificial [tax avoiding] steps and instead tax theincome ... Whenever you put a rule in place the accountants find a way to break the rules. What we have to say is: rules are not good enough. We need a principle that lets us say (tax avoidance) is wrong.
Comedian Jimmy Carr has admitted he made a "terrible error of judgement" over his tax arrangements.
Jimmy Carr did not break the law, but he exemplifies the feeling that the rich live by different rules than the rest of us.
The Government has re-stated it will crack down on the shady world of tax avoidance. Laws to do so may now be fast-tracked.