David Miliband could be saving thousands of pounds through tax avoidance
Labour MP David Miliband is channeling his income through a company in order to avoid tax, an investigation by the Mail on Sunday has revealed.
The MP pays his non-parliamentary earnings into The Office Of David Miliband Limited, a company with shares owned by both Mr Miliband and his wife.
By channeling income through company shares, and exploiting his and his wife’s tax-free allowance on company dividends, Miliband avoids paying income tax on some of his earnings.
A senior accountant has estimated that Mr Miliband’s annual tax saving could runs into six figures.
The tax avoidance method was criticised by HM Revenue & Customs during the last Labour Government when then-Chancellor Alistair Darling promised legislation to clamp down on similar tax avoidance schemes. No such law was ever introduced.
The Mail on Sunday also explored Mr Miliband’s lucrative non-parliamentary earnings, suggesting he recently earned more than £21,000 a day for work in the United Arab Emirates.
A previous MoS report had revealed the former Foreign Secretary also works for Pakistan-based City firm Indus Basin Holdings. It was reported that he will do just five days’ work a year for the firm in return for a £50,000-a-year salary.
Former prime minister Tony Blair’s tax affairs have also been criticised recently. Research by The Daily Telegraph showed that a show a company set up by Mr Blair to manage his business affairs appeared to be avoiding tax.
The company, Tony Blair Associates, paid just £315,000 in tax last year on an income of more than £12 million.
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January 31st, 2012 at 6:50 pm (#)
“The tax avoidance method was criticised by HM Revenue & Customs during the last Labour Government when then-Chancellor Alistair Darling promised legislation to clamp down on similar tax avoidance schemes. No such law was ever introduced.”
It’s already introduced, it’s called IR35 and I’d love to know how he gets around the substitution test.