Jessica Fino 7 Nov 2017 12:07pm

Labour calls for inquiry into Lord Ashcroft tax affairs

The Labour Party has called for an inquiry into Lord Ashcroft’s tax affairs and into aggressive tax avoidancefollowing the leak of the so-called “Paradise Papers”

The shadow chancellor John McDonnell wrote in the Guardian that HMRC should investigate the amount of tax paid by Lord Ashcroft, a Conservative supporter who reportedly donated half a million pounds to the party during this year’s General Election.

The Paradise Papers revealed the secret overseas investments of the wealthy, including details of the Tory donor’s non-dom status for tax purposes.

Leaked documents showed he received payments of $200m (£150m) between 2000 and 2010 from his Bermuda-based offshore trust, and avoided paying any tax on these payments because he remained as a non-dom despite sitting in the House of Lords.

Ashcroft denied the claims, saying in a statement that, for each of the remaining five years during which he sat in the House of Lords, he was deemed tax resident and domiciled.

He added, “I can state unequivocally that I have not ignored rules, and that I do not control the Punta Gorda Trust, and never have done.”

McDonnell askedif Lord Ashcroft was subject to proper due diligence checks before his donation was accepted by the party.

“HMRC needs to investigate the amount of tax paid by Lord Ashcroft, and clarify his non-dom status. But beyond that we need a full public inquiry into aggressive tax avoidance and UK companies’ and individuals’ role in it,” he added.

“There is the faint smell of venality hanging over this affair and this government that will only be cleared by a credible investigation through a public inquiry.”

But when challenged during a conference of Tuesday, May refused to commit to a public register of the ownership of offshore companies and trusts, saying new measures were already creating more transparency.

Unite general secretary Len McCluskey said McDonnell was “spot on” to call for a full public inquiry into tax avoidance and for a full register into all companies and trusts.

“There needs to be much greater transparency and scrutiny. The government should refuse public contracts to tax avoiders - it is the government’s duty to use public money responsibly, and lining the pockets of tax dodgers is not doing so.

“This is a global problem that needs concerted international action, but there is nothing to stop Theresa May’s government taking the lead on this with robust proposals – and the budget on 22 November would be a good place to start.”

HMRC confirmed on Tuesday during a Public Accounts Committee hearing that it has not seen all of the leaked documents and have requested access to all the material.

HMRC chief executive Jon Thompson, said "“What we would like is full disclosure of that information, whatever’s been provided to the ICIJ, the BBC or the Guardian. If we are unable to collect it from them then we will see whether it’s possible to obtain that data in any other way.

“In the same way as we did with Panama [Papers], we look at every case of thax evasion very seriously. (…) I don’t want anyone to feel that we’re complacent in any way. We will chase those people down who try to hide money offshore and evade their tax."