The Liberal Democrats have drawn up draft legislation to force the Chancellor and any other government ministers to reveal whether they or their spouses claim non-domiciled status or have holdings in overseas tax havens.
Liberal Democrat Treasury spokesperson Christine Jardine MP has drafted the Ministerial Tax Residency Status Bill and will present it to the House of Commons once Parliament has returned from Easter recess.
It was recently revealed that Rishi Sunak was listed as a beneficiary of tax haven trusts set up in the British Virgin Islands and the Cayman Islands and held by his wife Akshata Murthy – just days after it emerged she was using her non-domiciled status to avoid paying taxes in the UK.
Ed Davey has written to the Cabinet Secretary and to Lord Geidt, the Prime Minister’s Independent Adviser on Ministers’ Interests, calling on them to investigate whether Sunak has broken the Ministerial Code.
Under the terms of the Liberal Democrat Bill, Rishi Sunak and any other government minister would be required to disclose whether any member of their household claims non-domiciled status for tax purposes, what overseas jurisdictions they pay tax in and if they are listed as the beneficiaries of trusts held abroad including in tax havens.
Liberal Democrat Treasury Spokesperson Christine Jardine said:
Rishi Sunak’s continued refusal to answer basic questions about his family’s tax arrangements simply won’t wash. It shows he is completely out of touch with people struggling to pay their bills.
The public deserve to know what other steps the Chancellor’s household may have taken to reduce their own tax bill while he hammers families around the country with unfair tax hikes.
We have a draft law ready and waiting for when Parliament returns, to force Sunak and other ministers to reveal if their households are not paying their fair share by using tax havens.
The Liberal Democrat draft Bill reads as follows:
Short title: The Ministerial Tax Residency Status Bill
Long title: A Bill to require Ministers of the Crown to disclose tax residency status of themselves and their household; and for connected purposes.
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24 Comments
Sorry, but we don’t need a Bill to force disclosure of whether Ministers and their families are seeking to legally pay less tax (which most of us choose to do) – we need a Bill to stop those legal ways of avoiding taxes.
How about all Lords, MPs and MSPs being required to publish their tax returns each year.
Would mean some folk wouldn’t want to serve – but that may be no bad thing.
@Brad Barrows
I agree about stopping tax avoidance but I’m not holding my breath.
@Stephen Harte
Why not make *all* tax returns public? As people are fond of saying in other contexts, if you haven’t got anything to hide…
Maybe I’m influenced by the fact that for 16 years of my working life the amount of my salary was in the public domain.
Surely, the requirements of the BIll need to apply to ALL MPs and thus PPC’s and their spouses. Additionally, the requirement needs to extend backwards in time, so to be an MP they need to be able to demonstrate they (and their spouse) have been a full UK resident for a minimum of 7 years and can furnish HMRC issued acknowledgements/receipts of a tax return being filed for the last 7 years, which if necessary HMRC could independently verify.
The only issue I have, is that for probably the first time in decades, we actually do have a Chancellor who actually understands finance and what Government can do; don’t see any one else in Westminster of a similar calibre…
Whilst this doesn’t guarantee that the PPC/MP hasn’t played the rules, it does make it abundantly clear
Not a fan of this or what will become an annual feeding frenzy of the gutter press as they rush to publish league tables of which Minister has the most and least money.
@Roland
“Additionally, the requirement needs to extend backwards in time, so to be an MP they need to be able to demonstrate they (and their spouse) have been a full UK resident for a minimum of 7 years……..”
People do work abroad legitimately – presumably you would want to ensure that such people retain their UK domicile throughout their overseas working time…?
It might be rather difficult for someone who has not been old enough to take paid employment for 7 years to provide 7 years’ worth of tax return evidence. Are you going to deny such young people the right to stand for Parliament?
Not everyone with a UK income has to file a tax return anyway.
“The only issue I have, is that for probably the first time in decades, we actually do have a Chancellor who actually understands finance”
Pardon? It seems to me he may understand macro finance but has zero understanding of the everyday financial problems endured by many ordinary people.
As evidenced I suggest, not only by his failure to protect the less well-off from the ongoing cost of living increases but also his donating of £100,000 to his old school.
https://www.independent.co.uk/news/uk/politics/food-banks-rishi-sunak-living-costs-b2054244.html
We shouldn’t need food banks in the first place but I would regard distributing £100K across the nation’s foodbanks a much better use to that money. As it is – the donation just serves to demonstrate how totally out of touch Sunak is with ordinary people.
We need tobhet some terms defined and understood.
Tax evasion is illegal and a criminal offence. Rightly so.
Tax avoidance is arrangement of one’s affairs so as to pay the minimum amount of tax due. For example putting funds into an ISA account to avoid paying capital gains tax on gains and income tax on income generated. It’s legal. Another example is the non dom regime that ultimately is designed (as I understand it) to prevent an individual having to pay tax under the tax regimes of two different states and (in the UK case in any event) to encourage the internationally wealthy to locate/invest in Britain.
Governments take political decisions to put legislation into place that allows or disallows avoidance and manipulate the amount of tax raised, try to increase/decrease equality, reward their supporters etc.
This has quite a vindictive feel to it, and I’m not sure it is the “win” many seem to think it is.
The Bill is clearly a stunt targeting the chancellor and particularly his wife. From a purely political point, I have seen quite a bit of concern within the British-Indian community that this has a sense of targeting someone due to nationality. This is guaranteed to be a loss, I recognise that some of that has been encouraged by the Chancellor, but Labour have not helped themselves. The LibDems jumping in carelessly would be foolish.
There is a need for transparency but also there is a need for any system proposed to not look opportunistic and vindictive against the foreign spouse of a politician. This needs far more thought, and the way it is announced needs to be much more careful than this.
@Tristan Ward
“Another example is the non dom regime that ultimately is designed (as I understand it) to prevent an individual having to pay tax under the tax regimes of two different states”
That could be handled by dual taxation treaties between the countries concerned – without issues of domicile coming into it.
“and (in the UK case in any event) to encourage the internationally wealthy to locate/invest in Britain.”
Russian oligarchs? I’m not sure their property investments are doing this country much good.
And possibly the government is overdoing the foreign element of the investment to the detriment of the people of our country? Loss of influence over the economy?
@ FS People
“The Bill is clearly a stunt targeting the chancellor and particularly his wife. ”
We should be entitled to know the financial arrangements of ministers and their partners do not risk contradicting the interests of the people of the country as a whole.
We need to be satisfied that ministers do not have any potential conflict of interest which might impact their ministerial decisions. The chancellor of the exchequer is a particular case in point since he has been taking decisions leaving the less well off to make sacrifices which the wealthy wouldn’t begin to notice.
“I have seen quite a bit of concern within the British-Indian community that this has a sense of targeting someone due to nationality.”
I’m sure there are plenty of members of the British-Indian community who are suffering poverty because of the chancellor’s decisions.
We don’t need to personalise it or turn it into a feeding frenzy, we just need simply to ‘end non-dom’. Its part of the past ‘entitlement’ culture which has been allowed to quietly remain in place by and for the individuals who benefit from it.
It has no place in a modern, equitable taxation system.
Certain important points appear to be missed. “Trusts” seems to be a political bogey man for many, but they are completely normal. Many people have their homes owed this way even though they may not understand that is the case. Also, blind trusts are useful for those who enter political life with previous wealth. If someone knows where their wealth is held it can either influence them in their decision-making or can give the impression of that influence (or both).
When you have rich people who are beneficiaries of family trusts (particularly if they are foreign) may have their benefit coming to a UK blind trust. This is not some simple situation and simplistic solutions is not a good response. There is a need for both transparency rules but they need to be functional.
I would also point out what is intended by “spouse” are unmarried partners covered? If we do start requiring that will it require disclosure of private relationship status of individuals? I would have hoped the LibDems of all parties would have considered that situation before proposing legislation?
@ Nonconformistradical
I think you have missed my point. I am not saying there is not a need for a system for monitoring an limiting conflicts of interest and also one to maximise transparency. However it needs to be done carefully and not in a way that looks like it is trying to exploit a situation to score political points at the expense of the foreign spouse of a minister.
There are many things wrong with Sunak’s time in office, there is also the longstanding issue of this matter being avoided in terms of addressing it carefully. However, many people who really don’t like the Tories, and Sunak’s performance in particular, are quite uncomfortable about the time of this approach. Just look at headline here.
Auto-correct issue:
“uncomfortable about the time of this approach”
Correction
“uncomfortable about the tone of this approach”
@ Nonconformistradical
I’m not suggesting the non-dom regime should or should not be reviewed. I’m merely making the point that using it does not of itself mean the user is criminal or immoral. It has in one form or another been around for more than 200 years.
There may well be a political case for reform or abolition.
I have thought for a long time that having to declare fthe financial matters of a spouse/partner as a parish councillor is wrong. In the 1970s women campaigned to get separate taxation from their husband so that they could, if they so wished, maintain their financial privacy and independence. Should an individuall without a spouse/partner but living with,say, a close relative have to know and declare their financial information?
@Kay Kirkham
I have no objection to individual taxation where that is the choice of the individuals concerned but I do object to the unfairness of married couples having to be taxed as individuals without the option of pooling taxes and tax allowances. At present, two married couples with identical family incomes pay difference amounts in income tax depending on how that family income is split between the two individuals. No political party currently stands for addressing this unfairness – this is an opportunity for the Liberal Democrats to stake out a distinct position that will appeal to a particular section of the electorate.
@Brad Barrows
One partner can transfer any unused married couples tax allowance to the other.
https://www.gov.uk/government/publications/income-tax-notice-of-transfer-of-surplus-income-tax-allowances-575t
@ F S People: ” This has quite a vindictive feel to it.” at 10.57 above. I am disappointed that so few have supported your straightforward point, which was well said. We must not copy our rival parties, in leaping instinctively and immoderately on any perceived weakness of an opponent. It is ungenerous and does not go down well with the majority.
And — off the point, I appreciate — surely our concern should be politely but unmistakably to chide the leader of the Labour party, for being so keen to become PM that he spoils his own best chance by doggedly refusing to encourage and support the growing desire in the party he leads (?) for inter-party collaboration in promoting Proportional Representation. The next election will be a promising time, and all must grab it.
And finally — please pardon my senescent cheek — can our own party show that it understands that it must do more to encourage the youngest of those entitled to vote? Consider the world they must soon inherit . . . . . .
@Nonconformistradical
Actually the rules only allow one partner to transfer only £1260 of their tax allowance to the other partner, so long as he or she is not a higher rate taxpayer – unless you are thinking of Married Couples Allowance that only applies if one spouse was born before 1935. My point is that this does not address the basic unfairness of two married couples having identical family incomes but one family can have to pay considerably more income tax Depending on the proportion contributed by each individual in the couple.
We have a stubbornly large “tax gap” in the UK of an estimated £35bn i.e. the difference between what the Government theoretically should get and what it actually gets. This is made up of fraud, mistakes, and aggressive but legal tax avoidance.
Governments have been talking for years about clamping down on tax avoidance with little meaningful progress. It’s a transparency issue that the public should be made aware of any conflicts of interest, including if those responsible for clamping down on tax avoidance are benefitting from it. And this needs to extend to spouses due to the ease in which wealth and assets can legally be transferred between them.
@ Nick Baird
I’m afraid I don’t understand. Why do you say the government “should get” money from “aggressive but legal” tax avoidance. If it is legal government is not entitled to that money. If government needs to raise more tax, or decides certain kinds of people should pay more tax it should pass the necessary laws, and there is a case for that.
@Nonconformistradical
>People do work abroad legitimately
Yes, I have and retained my full UK citizenship, residency and pay UK taxes throughout, so what is the problem?
>…. Are you going to deny such young people the right to stand for Parliament?
Does someone under the age of 25 really have sufficient life experience to actually be an effective MP or minister and would you want that person to be your MP. However, this is an edge case that can easily be resolved, without sacrificing the principle of 7 years of residency and paying the UK taxes single nationality UK residents pay.
>It seems to me he may understand macro finance but has zero understanding of the everyday financial problems endured by many ordinary people.
Whilst I agree he may have little appreciation of the financial problems of the less well off, I suspect the less well off are actually doing better than if we had a Chancellor who was more focused on their needs… I can’t think of a previous Chancellor who would have recommended furlough instead they would have tightened belts and cut back and so create a recession…
>We shouldn’t need food banks in the first place
Agree, however, it is a good thing we have independent foodbanks that accept fresh food from supermarkets and actually give it out to those that come asking, and so help to reduce food waste..
Having received his statutory fine from the metropolitan police, it is now likely that Sunak will resign anyway. Johnson may need to try to brazen it out, but Sunak hardly needs to.