Tories to compel peers and MPs to pay UK tax

Cameron seeks to take the initiative over non-dom controversy

Michael Savage,Political Correspondent
Monday 14 December 2009 01:00
Comments

Peers and MPs will have to pay tax in Britain or be forced to give up their seat should the Tories win the next election in a move designed to end the controversy over its deputy chairman, Lord Ashcroft, and the high-profile candidate, Zac Goldsmith.

In a surprise announcement, David Cameron promised to rush through a law banning anyone with non-domiciled or non-resident tax status from the Commons or the Lords. The Tory leader has been dogged by questions about the tax status of Lord Ashcroft. His pledge also came on the day that Mr Goldsmith, his adviser on the environment and parliamentary candidate for Richmond Park, was accused of avoiding millions in tax through his "non-dom" status.

Gordon Brown had also been planning legislation that would have forced all MPs and peers to declare their tax status, but would not have banned them from taking up their seat. Sources at Number 10 said it was too late to embarrass the Tories by introducing the measure ahead of the next election. Mr Brown has been beaten to the punch by the Tories, who hope their law will also smoke out Labour and Liberal Democrat parliamentarians who do not pay tax in Britain.

"I think it time to pass a law that says that if you want to be in the Houses of Parliament, if you want to be a legislator, you need to be or be treated as a full UK taxpayer," Mr Cameron told Sky News. "We would pass that law if we get elected. We would bring it into force as rapidly as we could. I think that would put the situation beyond doubt." But he stopped short of forcing all MPs to publish their tax returns, a rule in the United States. "Do we need to know every single aspect of someone's tax affairs?" he said. "I don't think we do."

The Government accused Mr Cameron of using the announcement to put off the questions about Lord Ashcroft and Mr Goldsmith until after the next election. "He claims to offer transparency, but this is simply distraction and deferral," said Jack Straw, the Justice Secretary. "This is simply a brazen attempt to avoid clearing up the confusion about Lord Ashcroft, 10 years after he promised to clear up his tax status."

Lord Ashcroft, who has recently donated more than £5m to the Tories, committed to paying tax in Britain as a condition of being made a peer in 2000. Since then, he has not commented publicly on whether he has lived up to the pledge, insisting it was a private matter. Since January, the Electoral Commission has been investigating whether Bearwood Corporate Services, the company through which Lord Ashcroft channels money to the Tories, is legally entitled to make political donations. Parties can accept money only from companies trading in Britain. Mr Cameron insisted the donations were "within the law".

Mr Goldsmith, who has said he is changing his tax status, was accused by the Liberal Democrats of avoiding at least £5.8m through the non-dom tax status he inherited from his father, the billionaire financier, James Goldsmith. Mr Goldsmith dismissed the figure as "fantasy". His wealth, estimated at £200m, is held by a family trust in the Cayman Islands.

Under pressure: Politicians and their tax status

Zac Goldsmith

After admitting that he had inherited non-dom tax status, Mr Goldsmith, the Tory candidate for Richmond Park, is now changing his tax status after pressure from David Cameron.

Lord Paul

The steel tycoon has told Labour that it will lose his support if non-doms are banned from making political donations. Under the Tories, refusal to change his status would see him kicked out of the Lords.

Lord Ashcroft

The deputy chairman of the Tory party pledged to become resident in the UK for tax purposes after receiving a peerage in 2000, but he has not yet confirmed his current status.

Baroness Gardner

The Australian-born Tory is open about her non-dom tax status, but will have to either give it up or lose her place in the Lords should her party win the general election.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

By clicking ‘Create my account’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in