Jimmy Carr
Jimmy Carr the comedian got into hot water after it emerged he had been avoiding tax on his millions (Reuters)

While big names like Jimmy Carr and Gary Barlow shield their millions from the taxman through offshore investment schemes, and others like retail magnate Sir Philip Green shelter billions from the prying eyes of HMRC, the rest of us simple folk just have to lump it and pay our way.

Without serious wealth and a harem of tax accountants, many people simply think access to tax avoidance methods is out of their reach.

But in the absence of decisive and comprehensive government action on tax, lowering the burden for those who pay the full amount and tightening the loopholes for those who don't, why shouldn't the average Briton take an "if you can't beat 'em, join 'em" attitude to their personal finances?

"As an everyday person if somebody was to form a limited company that was engaged to provide their services instead of being employed then they would be able to pay less tax because they would be able to take advantage of dividends and corporation tax rates," Paul Bennett, employment and company law expert at find-a-solicitor service Contact Law, told International Business Times UK.

"So forming a company as an individual and providing your services through it is one way forward to reducing tax."

This is particularly useful to those who can offer freelance services and derive an income from more than one company.

Corporation tax in the UK is 20 percent, significantly lower than the higher and additional rate income tax bands of 40 and 50 percent respectively.

After channelling your earnings through the company and paying the due 20 percent tax, you draw out cash in dividend payments.

These dividend payments are also subject to tax, but after allowances the overall combined tax owed could work out less than that from income tax on earnings through employment.

Also you would also be able to claim VAT back on goods and services bought for your business, such as computers, furniture and so on.

HMRC's IR35 rules

Though this setup may be beneficial to you, it is still not available to everyone and the government has recently clamped down on people using this method to avoid tax.

Chancellor George Osborne announced in his 2012 Budget a strengthening of HMRC's IR35 rules, aimed at clamping down on this type of tax avoidance.

"The acid test for IR35 is are you genuinely engaged as a company," Bennett said.

"For example in the IT sector, lots of IT consultants set themselves up as limited companies and HMRC has for a number of years challenged those arrangements saying they are purely there to avoid tax.

"This does go on from quite a small level.

"The investigation into K2 and the tax scheme that Jimmy Carr was involved in, that is frankly no different to what many builders and IT consultants who are one man bands have experienced over a number of years.

"Every week we probably advise four or five people who are setting up either a limited company or a consultancy where they are trying to save tax.

"It is always about managing the savings from tax with the risk of being deemed to be a real employee."

Successive governments have allowed certain sectors to get away with such tax arrangements while putting pressure on others such as the IT and construction sectors, said Bennett.

Those found by HMRC to be in breach of the regulations would "owe the tax that is due, they can be fined, and they can be made to pay a 100 percent uplift on the tax," Bennett said.

It is as simple as if you cannot justify your existence as a company by having a diverse range of revenue streams from different sources, you are not able to set up such a beneficial tax arrangement.

"So, man in the street who works in a bog-standard job - there is nothing he can do," Bennett said.

"But the type of person who perhaps has services that they could provide to four or five different organisations - whether those be IT, marketing, business development - they could set themselves up as a limited company and look to mitigate their tax that way.

"That would be lawful providing they comply with the IR35 regulations.

"If they are employed, if they are integrated into a business, they can't do it.

"It is a dangerous tactic, but people do try and adopt it."

Anyone considering a change in their financial arrangements should always seek professional advice first, Bennett adds.