Jimmy Carr paid £8.5 million in cash for his home. He has pulled out of the ‘tax avoidance scheme’ and has apologised. The comedian admitted he had ‘made a terrible error of judgment’

He also said his accountant told him the scheme was legal. Carr was one of thousands to use an off-shore scheme to pay as little as 1 per cent income tax. His credibility has been severely affected.

Prime Minister David Cameron branded his partaking in the scheme as ‘morally wrong’.

In a statement, the comedian insisted that he was told the scheme was ‘totally legal’. After intense public pressure he admitted he has withdrawn from the scheme.

A Downing Street spokesman said:

‘I think it is obviously welcome,’ a No 10 spokeswoman said.

‘HMRC are working hard to investigate the sort of scheme that Jimmy Carr had been reported to be involved in to ensure that they are not aggressively avoiding tax, and, if they are, they are closed down.’

The spokeswoman defended Mr Cameron’s to speak out against Mr Carr.

‘The Prime Minister was expressing what probably lots of people felt after reading the coverage,’ she said.

The revelations are worse as Carr has publicly mocked tax avoidance schemes.

Apparently Carr puts away £3.3million a year via the K2 tax scheme, which is used by more than 1,000 tax avoiders.