U.K. Probing Tax Scheme Used by Comedian Jimmy Carr (Report)

The U.K. tax department is investigating a tax-avoidance scheme used by wealthy individuals, including comedian Jimmy Carr and possibly other celebrities, according to British press reports.

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Her Majesty's Revenue and Customs, which is responsible for the collection of taxes, is looking at cases of individuals paying just 1 percent income tax, The Times of London reported.

The Telegraph said that HMRC representatives have confirmed that a scheme by a company called K2 on the island of Jersey is under investigation and have vowed to "challenge it in every way available to them."

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The tax scheme reportedly protects £168 million a year from tax payments, with Carr mentioned in media reports as the largest beneficiary. The Times reported that Carr sheltered £3.3 million a year through the scheme. Overall, there are believed to be more than 1,000 beneficiaries.

Lawyers for the comedian, who was part of the star-studded Jubilee Concert for Queen Elizabeth II this month, have confirmed he is a member of K2 but denied any wrongdoing. They say the scheme had been disclosed to the authorities.

The Times reported that Carr said at a performance where an audience member called him out on the tax issue, "I pay what I have to and not a penny more."

Prime Minister David Cameron told ITV News on Wednesday that Carr's tax arrangements were "morally wrong" and vowed that the government would crack down on "these very dodgy schemes."

Media reports have also mentioned claims that members of pop band Take That -- Gary Barlow, Howard Donald, Mark Owen and their manager Jonathan Wild -- invested £26 million or more in a similar scheme offered by a company called Icebreaker Management Services. The Telegraph said a spokesman for HMRC could not confirm whether or not members of Take That or their manager had been involved in an Icebreaker scheme.