Jimmy Carr, one the UK’s highest earning comedians, has hit the headlines and caused controversy over his tax affairs.

According to The Times, Mr Carr uses an offshore K2 scheme to cut his income tax liability to as little as one percent. It was reported that he pays £3.3 million a year into a Jersey-based company, which then loans him back the money. With loans untaxable he substantially reduces his tax bill.

Mr Carr’s lawyers told the newspaper that the scheme was disclosed to the relevant tax authorities, and that like many wealthy individuals he was managing his tax affairs efficiently.