Corbyn’s Thousands in Offshore Income

Corbyn has eventually located his tax return for the last year – the most interesting thing is that he appears to have filed it late. Was he fined?

What isn’t disclosed is that in previous years Jezza made a significant amount of income from offshore sources. In the last few years he declared £5,000 in payments from Press TV, the Iranian state television channel, and another £5,000 from Al-Jazeera, the Doha-based Qatar-backed channel. Not to mention junkets to the Middle East, South America and elsewhere worth tens of thousands paid for by foreign governments. The corporate tax rate in Qatar is just 10%…

UPDATE: Corbyn’s spokesman confirms Jezza was fined £100 for filing his tax return late.

Osborne’s Tax Summary

The Treasury say:

“The dividend income relates to shares in Osborne and Little Group Limited, a UK resident manufacturing company of wallpapers and fabrics that was founded by his father. The dividends are derived from shares that the Chancellor of the Exchequer owns directly, and also as life tenant* of a family trust, based and resident in the UK which holds, as its sole asset, shares in that company. The Chancellor of the Exchequer paid income tax on these dividends.”

Osborne and Little has been hit by its own offshore rowThe PM, Chancellor and Shadow Chancellor have all released summaries of their tax returns – the Leader of the Opposition still can’t find his…

*A life interest trust is a trust established to provide the beneficiary with (who is known as the ‘life tenant’) the right to receive the income (after expenses) from the trust.  This right is usually given for their lifetime.  On their death the trust fund passes to the other named beneficiaries, known as the ‘residuary beneficiaries’.  Basically it protects the family capital and ensures it passes to children rather than, for example, ex-wives… 

BBC’s £84 Million in Bermuda

SDFFSDD

Cameron’s taxes and the Panama Papers have led the BBC News bulletins for the past week, yet licence fee payers remain unenlightened about Auntie’s own offshore financial arrangements. What better place to start than the 2013 BBC Pensions report, which lists investments held by the Beeb’s £9 billion employee benefit scheme. Scroll down to page 16 and it is disclosed that the BBC used investment managers Nephila Capital Ltd to invest £84 million:

dsfds

Nephila Capital is a wholly owned subsidiary of Nephila Holdings Limited and is a Bermuda domiciled company. As the BBC lines up pundits to jump on the outrage bus about Dave’s £30,000 in a Panamanian unit trust, they stashed £84 million with investors based in Bermuda. There is lots more of this…

Look in the Mirror: Millions Held Offshore

“David Cameron has behaved like a chancer over offshore funds,” blasted the Mirror’s leader on Friday: “Voice of the Mirror says hard to believe the PM will end the use of offshore financial hideaways by the filthy rich when he is cut from the same cloth”. What the Mirror didn’t tell its readers is that their paper is also “cut from the same cloth”…

When Trinity Mirror tried to raise funds by issuing new shares to investors, it set up TM Finance (Jersey) Ltd, a “special purpose vehicle” to collect the proceeds offshore. Trinity Mirror’s annual report discloses the existence of “The Trinity Mirror Employee Benefit Trust”, a pension scheme whose beneficiaries could well include Mirror employees like chief offshore critic Kevin Maguire. Is it really Mirror Associate Editor our Kev’s trust? Appleby Global (Jersey) Ltd administer the Mirror’s offshore millions boasting: “Our fiduciary operation in Jersey has provided a broad range of offshore fiduciary and administration services… Our clients include high net worth private individuals and families along with an enviable array of global and UK businesses, such as… Trinity Mirror”. Please, tell us more about those “offshore financial hideaways”…

Then there is the Trinity International Restricted Share Plan, administered by Barclays Wealth Trustees (Guernsey) Ltd, another offshore trustee. Mirror, Mirror against the wall, who is the most hypocritical of them all?

UPDATE: Our Kev says “not me guv”.

Rich’s Monday Morning View

Houses540

READ: Cameron’s Tax Returns

Cameron has released his tax returns for the last six years. Wisely his inheritance was split into £300,000 from his father and a £200,000 gift from his mother in 2011, tax planning which will ultimately save him £70,000 in inheritance tax if his mother survives 7 years from the gift. Though Osborne’s pre-election Budget mockery of Miliband for “avoidance of inheritance tax” looks rich now…

Ken’s Spectacular Tax Hypocrisy

Ken Livingstone has gone on Russia Today to call for Cameron to be jailed over his taxes. That is the same Ken Livingstone who sheltered his earnings in a company so he could save £1,000-a-week in tax. Ken paid 21% corporation tax rate on £319,478 of earnings by invoicing to Silveta Ltd, instead of paying the 50% top rate of income tax. He also owned 99% of a similar company twice prosecuted for non-payment of taxes. Ken’s effective tax rate in 2012 was 14.5%. Today he laughably calls Cameron “the most hypocritical prime minister of my lifetime”…

Why Didn’t Cameron Declare Blairmore in 2009 Register of Interests

Today brings some of the worst front pages for David Cameron since be became PM, as Labour MPs hysterically call for him to resign. Could Dave’s £30,000 in an offshore trust be fatal?

Cameron is responsible for the situation, not his father, because he bought the Blairmore shares himself in 2007. Though it is worth remembering there is nothing wrong with investing in a foreign fund. Crucially – and wisely – he sold the shares in 2010. If he still owned shares in a Panama trust while PM he would be under a lot more pressure…

Did Cameron actually avoid any tax? He insists he didn’t, and several top journalists and tax experts agree Blairmore was not a tax avoidance scheme. There is currently no dispute that Cameron paid all the UK taxes on his income from his shares. If Cameron had avoided tax by hiding assets offshore, the situation would be very different…

And what about the attack line Labour MPs are clamouring around, that Dave did not declare his Blairmore shares in his 2009 Register of Members Interests? MPs are not required to declare shareholdings in unit trusts, holdings below £70,000 or 15% of a partnership:

So this is a blind alley for Labour. Cameron was not the beneficiary of an offshore trust while PM, he appears not to have avoided any tax, and he did not breach parliamentary rules. If any of these points change, then his position becomes a lot less tenable…

Dave Had £30,000 Stake in Offshore Trust

He tells Peston he and SamCam did own a stake in his father’s Panama trust, which he sold for £30,000 in 2010:

“We owned 5,000 units in Blairmore Investment Trust, which we sold in January 2010. That was worth something like £30,000.

I paid income tax on the dividends. There was a profit on it but it was less than the capital gains tax allowance so I didn’t pay capital gains tax. But it was subject to all the UK taxes in all the normal way.

I want to be as clear as I can about the past, about the present, about the future, because frankly I don’t have anything to hide.

[On his £300,000 inheritance] I obviously can’t point to every source of every bit of the money and dad’s not around for me to ask the questions now.

In all of this I’ve never hidden the fact that I’m a very lucky person who had wealthy parents, who gave me a great upbringing, who paid for me to go to an amazing school. I have never tried to pretend to be anything I am not.

But I was keen in 2010 to sell everything – shares, all the rest of it – so I can be very transparent. I don’t own any part of any company or any investment trust or anything else like that.”

So the PM doesn’t know if he received offshore money in his inheritance, though he insists Blairmore was not set up to avoid tax:

“It wasn’t. It was set up after exchange controls went so that people who wanted to invest in dollar denominated shares and companies could do so. There are many other unit trusts like it, and I think it’s being unfairly described and my father’s name is being unfairly written about.”

There is of course nothing wrong in investing in a foreign fund, Cameron paid full UK taxes and sold the stake before be became PM. But as for the Downing Street news management, oh dear…

Hilary Benn Keeping Quiet on Family Tax Avoidance

Labour MPs are not pulling punches on the tax affairs of David Cameron’s father, calling him “absolutely disgusting” despite there still being some dispute over the extent of any tax avoidance that actually took place. What do they have to say about another prominent politician’s father and his tax affairs?

When Tony Benn’s wife died, he took steps to immediately pass his assets onto his children to reduce their eventual inheritance tax burden. The kids reportedly took part ownership of the family home in Holland Park, which was then quickly sold for £4.1 million. He also placed Stansgate House and its estate in trust, another nifty inheritance tax avoidance measure. Hilary Benn and his siblings directed benefited from his father’s careful tax planning. No wonder the Shadow Foreign Secretary has yet to comment on Dave’s predicament…

Labour PPB Star’s Accountants Specialise in Offshore Tax Avoidance

Art Malik

In Labour’s new Party Political Broadcast Art Malik rails against tax avoidance, claiming “the government squeezes the less well off while letting the richest avoid paying the taxes that the rest of us do”Malik is the director of a company called ML&J Ltd. The firm, which claims to engage in “motion picture production activities”, employs as its company secretary one Gina Malik, Art’s wife. A textbook little trick used by hundreds of actors, musicians and entertainers.

ML&J Ltd is registered to 24 Bedford Row, London. Coincidentally, that is also the address of its accountants, Mehta & Tengra. On their website Mehta & Tengra do not disguise how they help their clients’ companies avoid tax:

“Our accountants can conduct a review of your firm to determine areas where they can reduce your corporate tax exposure with an efficient strategy… forward planning can ensure compliance and result in considerable tax savings.”

Not only that, Mehta & Tengra even offer specialist “offshore tax planning” services.

Labour’s new crusader against tax avoidance owns a company that employs his wife and is registered to the address of his accountant specialising in aggressive tax avoidance…

PM Resigns Over Panama Papers

The Icelandic PM…

Khan Backed By Tax Avoiding Offshore Fund Managers

khan OFFSHORE

Khan is no stranger to dodgy backers. In an attempt to clean up his murky image, his campaign released a list of 100 business backers in the Evening Standard last Friday. Most were drawn from the few business backers still loyal to Corbyn’s Labour. The list includes backers such as Saker Nusseibeh, CEO of Hermes Investment Management – a group that currently manages 15 offshore funds – as well as top RBS banker Martin Bailey and Bank of America VP Jacob Taylor. Taxpayer owned RBS shelled out €23.8 million to German prosecutors in December to settle a tax evasion investigation, and was lambasted for racking up £1 billion in tax breaks earlier this year, while Bank of America recently had to dismantle a special tax avoidance group in disgrace. Khan’s business support is drawn from the types of companies his leader wants to investigate…

Cameron: I Have No Offshore Trusts, No Offshore Funds

Faisal Islam: The leader of the opposition has called for an investigation into your tax affairs for your own interests. Can you clarify for the record that you and your family have not derived any benefit in the past and will not in the future from the offshore Blairmore Holdings fund mentioned in the Panama Papers?

David Cameron: Sure. Look, the investigation we need, first of all, is for HMRC, our tax authority, to use all the information that is coming out of Panama to make sure that everything is done, to make sure that companies and individuals are paying their taxes properly.

In many ways what is coming out of Panama is what we are introducing in our own country, which is a register of beneficial ownership, so everyone can see who owns what company.

I own no shares. I have a salary as Prime Minister and I have some savings which I get some interest from and I have a house which we used to live in which we now let out while living in Downing Street. And that’s all I have. I have no shares, no offshore trusts, no offshore funds, nothing like that.”

As Guido pointed out this morning, it was always highly unlikely that he would benefit directly.

UPDATE: At this afternoon’s Lobby briefing No 10’s line is definitive: “To be clear, the Prime Minister, his wife and their children do not benefit from any offshore funds.”

Labour’s Brave Line on Tax Dodging Donors

tax hypocrisy mcdonnell

This is a pretty brave attack line from John McDonnell over Tory party donors who may have avoided tax:

“Is the Prime Minister happy to receive money from big donors who are accused of tax avoidance?”

Especially when you consider that Labour’s biggest donor Unite paid no corporation tax in 2011 and 2012, despite earning £5.78 million from their £51.6 million investment portfolio. The GMB union paid zero corporation tax on its investment income of £1.6 million, neither did the Community union on their income of £4.1 million for the period. McDonnell himself received £3,000 from Unite in 2014. As of last year who were Labour’s biggest non-union donors? Accountancy firm PricewaterhouseCoopers, who have been slammed by the Public Accounts Committee for “promoting tax avoidance”To paraphrase, is the Shadow Chancellor happy to receive money from big donors who are accused of tax avoidance?

No, Cameron Did Not Answer Panama Claims in the Past

The news that David Cameron’s father ran an offshore fund which avoided paying UK tax is not new – four years ago the Guardian published an almost identical story revealing the existence of the “entirely legal network of offshore investment funds set up in tax havens such as Panama City”. The old Guardian story noted that since Ian Cameron passed away “it is unclear which family member owns them” because offshore investments are not included in the family will. Then, as today, Downing Street would not comment as it was a “private matter for the family”.

The ‘new’ information in the Panama Papers is just finer detail on the old story, though Cameron’s spokesman still refuses to comment on whether the PM has money invested in the fund, because they have “responded to these allegations in the past”. That isn’t true, last time they refused to give an answer. It is unlikely that Dave is a beneficiary – that would have been a risk tantamount to political suicide and we know he has since not exactly been rolling in it, the Camerons have largely been supported by Samantha’s father’s money in recent years. In the unlikely event it does emerge that the PM is the direct beneficiary of offshore money he would find himself in a situation similar to the Icelandic premier – he would have to go. It’s no good pretending he addressed this in the past, Cameron has the chance to clear this up once and for all…

IFS’s Damning Verdict On Osborne’s Budget

ifs copy

On last year’s £27 billion OBR windfall:

What Mr Osborne didn’t tell us yesterday is that rather than finding £27 billion the OBR lost £56 billion down that same sofa. As it happens, the total loss to the sofa across the two fiscal events is £29 billion.

That loss largely arises from changes in assumptions about future productivity growth feeding in to lower economic growth over the rest of the parliament. If the OBR is right about that we should all be worried. This will lead to lower wages and living standards, not just lower tax revenues for the Treasury.”

On Osborne’s golden public finance rules:

“Mr Osborne had three fiscal rules – the welfare cap; the rule which said debt should fall as a fraction of national income every year; and the rule to get to budget surplus by 2019-20. He broke his welfare cap in November, and it is now broken by a bigger margin. He told us yesterday he is on course to break his debt rule by the end of this month. The surplus rule is the last rule standing.”

On that same subject Dan Jarvis has a good line that “I’ve had goldfish that have lasted longer than Osborne’s rules”….

Tory Fury at Budget’s EU Stealth VAT

osborne EU

The EU-enforced tampon tax causing a cross-party rebellion isn’t the only example of Brussels stealth tax imposed in this Budget. Following a decision by the Court of Justice of the EU in June last year, the 20% VAT rate was also forced upon “energy saving materials”, previously taxed at just 5%. People who want to insulate their homes are being whacked by an EU tax hike. Worth reading John Redwood on this – it has gone down like a cup of cold sick with Tory backbenchers. 

Other areas covered by the EU’s barmy VAT rules include digital services like Netflix, now charged at the place of purchase. Not only this, British digital businesses selling products in EU member states are subject to local VAT rates, for example Croatian, Danish, and Swedish VAT rates of 25%, or even sky-high Hungarian VAT at 27%.

Osborne announced yesterday “We understand that tax affects behaviour. So let’s tax the things we want to reduce”By his own logic, the EU wants to reduce energy efficiency and online businesses…

Cracknell’s Coke Confession

Former Olympic rower James Cracknell, the thinking man’s Sol Campbell, has put his name to a new Policy Exchange report calling for a tax on sugary drinks. Cracknell, PX’s “Senior Research Fellow for Obesity and Physical Activity”, praises Mexico’s tax on sugar-sweetened drinks which caused purchases to fall by 12%, concluding:

“The human misery and drain on the public finances is so great that the government has no option but to intervene… [a sugary drinks tax] is on balance a sensible intervention to help prevent the rise in obesity”

Ironically this nannying tax would hit Cracknell himself. Three years ago, the failed Tory candidate confessed to Men’s Health his two “worst vices“:

“I used to put ketchup on everything… Now I just drink a lot of coke.”

Diet, presumably.

Of course, a tax on sugary drinks would disproportionately hit poorer families. And wouldn’t be noticed by multi-millionaire coke fiends like Cracknell…

H/T Christopher Snowdon

McDonnell’s Partially Published Tax Return

John McDonnell has published part of his tax return, declaring income of £61,575 in the year until April 2015, on which he paid £14,253 tax.[…] Read the rest

+ READ MORE +



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