Tories attacked for taking tax haven cash
Filed under: Tax
While David Cameron has blasted comedian Jimmy Carr for using sophisticated tax havens to avoid paying tax, the Tories themselves have taken dirt-cheap loans from companies operating in known tax havens. Would it be hypocritical to keep them?
Need to know: Savings
Consistent?Labour MP for Bassetlaw John Mann told the Telegraph that Cameron ought to hand back the cash immediately. "It would be the height of hypocrisy if he didn't return those loans immediately. I'm sure it's an oversight that he'll pay attention to straight away to demonstrate his consistency."
The loans made to the Tories are attractive: one £250,000 loan came from Juniper Trading, registered in the British Virgin Islands says the Telegraph. Given in 2004 at 0.25% below base rate - and not to be repaid till 2029. Plus a £950,000 loan from Liechtenstein-based Medlina Foundation at base rate plus 1%.
The Conservative Party press office claimed in a statement that these "historic loans [come] from before David Cameron was Conservative Party leader. The Conservative Party no longer accepts loans from non-UK trading companies."
Taxing timesThe Prime Minister has said tax avoidance does not have to be illegal to be morally reprehensible (Cameron has also avoided so far giving a view on singer Gary Barlow who also been accused of deploying a similar tax avoidance scheme that Carr used).
Part of the problem is that definitions about tax avoidance are problematic even to HMRC. "It is impossible to provide a comprehensive definition of avoidance," is the best HMRC can do currently.
But as real-world working incomes fall and more is known about the tricks already hugely wealthy people deploy to limit their tax liabilities, politicians will need to be more careful about how they treat tax, from stump speeches to government policy to party funding.