Public Affairs: Soap Box - Stephen Day, MD, Portcullis Public Affairs

The Prime Minister's decision to publicly criticise Jimmy Carr for using a tax avoidance scheme looks likely to be one he will regret.

Observers will note that the timing was not without irony, coming just two days after he said the UK would 'roll out the red carpet' to French businesses leaving the country due to the introduction of a higher top rate of tax.

Furthermore, if any of David Cameron's professional associates are shown to be involved in similar schemes, he will lose the political capital he may have gained in highlighting a high profile case of morally dubious tax dealings.

Unsurprisingly, questions have already emerged about the decision to criticise Carr in particular, as opposed to Sir Philip Green, a newly appointed government adviser, and singer Gary Barlow, a Tory supporter and OBE recipient, who has been involved in a similar scheme.

Cameron has reignited debate over whether this sort of scheme should be made illegal. However, it is questionable whether closing every loophole in such a complicated tax system would be possible.

A report by the 2020 Tax Commission does advocate the introduction of a single income tax of 30 per cent on both labour and capital. This is an alternative system that is worthy of serious consideration.

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