Red-Faced Nigel’s Offshore Trust Fund

Nigel Farage has admitted he set up an offshore Isle of Man trust fund in 2003 for tax reasons. His accountants tell the Mirror he made no money from it though:

“It was a mistake for three reasons. Firstly, I’m not rich enough to need one and I am never going to be. Secondly, frankly, the world has changed. Things that we thought were absolutely fair practice 10 years, 20 years ago, 30 years ago aren’t any more. Thirdly, it was a mistake because it cost me money. I sent a cheque off to set it up.”

Though you can hardly say UKIP are in favour of anything other than lower tax bills, it’s tricky given Farage criticised the Isle of Man in particular in the EU parliament recently. He’s feeling the heat this morning. Welcome to big boys’ club…

UPDATE: Farage did have a go at the EU’s tax free salaries recently, though he defended the legality of tax havens and blamed high taxes for the need for tax havens. Not so hypocritical…

WATCH: Dave’s Tax Dodge Dishonesty

Brutal stuff from Dave on Labour’s tax avoiding donor:

“It is this government that is putting aggressive tax avoidance at the heart of the G8 agenda, and what do we hear this week from the Labour Party? They give tax avoidance advice to their donors.”

His bluster was the only highlight of a dull PMQs, though this is utterly dishonest from the PM. Miliband might be in hot water here, though the truth is that all parties offer tax avoidance advice to their donors, Labour, the LibDems and the Tories. As Guido reported last summer, Cameron’s own legacy scheme helps donors “reduce or even remove completely” the inheritance tax liability of rich Conservative backers.

All parties advise donors on how to avoid tax on their donations. Dave is in no position to take the moral high ground. 

Labour Tax Dodge Could Pay For 70 A&E Nurses For a Year

Miliband’s tax dodge during the Q&A after his speech was nowhere near good enough to make the questions go away. Ed vows that the reason the Mills donation was made in shares is because “he wanted the Labour Party to have a steady stream of income which we will get from dividends”. When Mills himself was asked why he donated shares he said: “To be honest with you, it is the most tax efficient way of doing this. Labour has got people who deal with compliance and the legal side of all this. They are very sensitive nowadays”. One of them is lying.

The Telegraph’s accountants works out that had Mills chosen to make a donation of that size in cash, he would have had to pay £1.46 million to HMRC. Guido calculates that Labour’s efficiency trick has cost the Treasury enough money to pay for 70 A&E nurses for a year. What was that about an A&E crisis, Ed?

Tellingly it seems no Labour MPs are willing to come out and defend his position. Which reminds Guido of an anecdote shared by in house tax avoidance expert Margaret Hodge earlier this week:

“I have to share with you the classic email I had on one occasion, where I had to talk with Charlie Falconer about some shared responsibilities, and I got a speaking note from officials. It said:

“I’ve drafted up a one-page what-to-say and what-not-to-say. If there are any awkward, direct questions, it is entirely open to you to say “That’s a matter for you Lord Falconer”. You might be wise to do so. Sympathetic nods; “hmm”, “interesting” and “ah I see” are good too.”

So, I was well and truly told what was expected of me as a Minister.”

Would explain the silence from Labour MPs today. Perhaps Hodge can investigate…

WATCH: Miliband Dodges Tax Question

He says that Labour will pay tax on their dividends, but that wasn’t the question was it Ed? The key point is that John Mills avoids paying tax himself by giving the money to the party in shares. For some reason Miliband dodged that. No denial that Labour advised Mills on how to donate the money in a tax efficient way either…

Deadline Day For MPs’ Expenses Claims Today
Happy Tax Freedom Day!

Are you an Honourable Member yet to get his or her money’s worth from the taxpayer this year? Fancy an iPad, laptop, or maybe if you’re feeling particularly piggy a cosy little rent-swap this Thursday morning? There are just a few hours left for greedy MPs who have left it late to submit expenses claims for this financial year. Guido’s source in IPSA is expecting a fair few claims to come in on deadline day, so it isn’t going to be a cheap one for the taxpaying public. Fill your boots.

Ironically, today is also the ASI’s Tax Freedom Day. This means that for the average citizen, today is the day you start to actually keep the money you earn; everything you have made so far this year went to the state in tax. Perfect timing.

UKIP Call on HMRC to Investigate Hodge the Dodge

UKIP economic spokesman Godfrey Bloom has gone after Margaret Hodge, demanding that HMRC “investigate unanswered questions from C4 News, Sky News and Guido Fawkes about her ‘knowledge’ of the tax affairs of her family trust”:

“It beggars belief that Hodge stated that her family company paid ‘every penny’ of the tax it owed although later she admitted that did not know how much tax it actually paid. Yet, this woman is chairman of the House of Commons Public Affairs Committee. Hodge comes in at No 15 on the Times’ Politicians Rich List, with a mere £18m tied up on the family business, which is in a family trust so there is no inheritance tax to pay.  One rule them and one for the rest of the plebs?  I call on HMRC to investigate.”

Always one to help expose tax hypocrisy, here are a few questions HMRC should ask:

  • Why Hodge claimed that “I am a tiny, tiny, tiny shareholder” in Stemcor when her direct shareholding is worth £1.8 million.
  • Why Hodge holds several million pounds more worth of Stemcor shareholdings in trusts.
  • For what purpose Hodge holds these shareholdings in trusts other than to reduce the risk of a future tax liability.

As Hodge the Dodge said herself last week, “I think what we are going to have to do is order somebody to come who can give us answers to the questions…”

Another Downing Street Comms Success

4:43pm:

5:06pm:

Awkward.

Miliband’s Google Glass House

Just one problem with Ed’s Google-bashing this afternoon:

Guido readers will know that HuffPoUK is owned by AOL Limited, whose parent company is the Luxembourg-registered AOL Europe Sarl.

In 2010 AOL UK Limited, HuffPo’s esteemed owners, had a revenue of £78 million. Despite that they paid just £122,000 in corporation tax, cleverly moving £30 million out of the reach of the UK tax authorities by “repatriating” a dividend payment to a tax avoidance special purpose vehicle (SPV) AOL Europe Sarl, registered in the tax haven of Luxembourg. This meant, despite returning 38% of revenue to shareholders, they had an effective tax rate of less than 1%. Guido looks forward to Ed’s article attacking AOL and HuffPo for “going to extraordinary lengths to avoid paying taxes”. His spokesman insists that “all companies need to be responsible.”

Further reading on HuffPo’s tax avoidance hypocrisy:

James Tobin: Lefty Tax Campaigners Misuse My Name

A great little nugget in the FT this morning: before he died Professor James Tobin, he of the ill-advised Tobin Tax, accused loony lefty tax campaigners of misrepresenting his ideas: “I have absolutely nothing in common with these anti-globalisation rebels. […]

+ READ MORE +

Ed’s Evening With Evil Eric

Dave dodged the opportunity to ask Google supremo Eric Schmidt about his company’s commendable methods of legally maximising their shareholders’ profits when the pair met yesterday. Surely tomorrow Ed will keep his own promise and grill Schmidt about Google’s […]

+ READ MORE +

WATCH: Tax For Dummies

The wonkish equivalent of a motherly lesson in life from the Taxpayers’ Alliance. Osborne’s suggestion that he would merge income tax and National Insurance two years ago has – surprise, surprise – gone absolutely nowhere. Hardly a shock seeing […]

+ READ MORE +

Hodge the Dodge: Spot the Difference

Compare and contrast Margaret Hodge’s holier-than-thou hectoring for not answering questions with her own non-answers in her Kay Burley interview yesterday. Here is Hodge berating Amazon’s Andrew Cecil at the Public Accounts Committee:

“Well, I think what we are going

[…]

+ READ MORE +



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Quote of the Day

Labour’s Austin Mitchell muses on the campaign:

“What’s the problem? No use pointing at the leader. Too late to change and unnecessary for Miliband is doing well at Question Time. His problem is connecting with the real world. He doesn`t speak people and his protective team of naive kids are playing West Wing rather than letting the leader relate to real people. We could point at the party, shrunk in numbers and enthusiasm because everything, from policy formulation to candidate selection, comes top down rather than bubbling up from below so campaigning becomes the opium of members deprived of any real role, though they`re not even sure what they’re campaigning about, with or for, but its role is marginal.”

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