An interesting version of a level playing field

Entrepreneurs who supported Brexit have complained of “outrageous” tax bills for their contributions to the Leave campaign.

Donations to political parties, charities and other bodies are usually deemed exempt from tax but HM Revenue and Customs has ruled that payments from individuals to referendum campaigns are liable.

Among those who have been asked to pay six or seven-figure sums are Lord Edmiston, who donated £1 million, the banker Peter Cruddas and the former Ukip donor Arron Banks who gave £8.1 million to the unofficial Leave.EU campaign and faces a £2 million bill. Demands were sent in the past fortnight, The Daily Telegraph reported.

As I understand it – open to being corrected – this is gift tax to stop people beating inheritance tax.

You give a large gift, you should pay the tax on it. Donations to a referendum campaign are such a gift. Thus tax is due from the donor.

Of course, tax money being spent on the same referendum – on either side – doesn’t face the same bill. Nor do corporate donations. Which does rather shade things in favour of the establishment, doesn’t it?

32 comments on “An interesting version of a level playing field

  1. You give a large gift, you should pay the tax on it.

    But surely the individuals will already have paid income tax on this money…?

    DK

  2. Just tell them to fuck off and launch a campaign. There are plenty of angry people to back them in non-payment.

    If worst comes to worst ask for donations to help . I’d spare a hundred so long as their was plenty of anti-EU/ReMainiac scum millage in the media.

  3. Haven’t read the full article through the paywall, but I’m wondering why anyone is being asked to pay tax now. If it was something like inheritance tax, then there would be no liability unless the gifter died.

    Large gifts are treated as “Potentially Exempt Transfers” for inheritance tax (IHT) purposes, with full IHT due in the event of death during the first couple (I think) years after the gift, reducing to zero if the gifter survives 7 years.

    Could the story be about gift-aid? Perhaps gift-aid was claimed on the donations, but now it has been decided that they were not eligible?

  4. Yeah the Russians did it Fatfuck.

    That you are a moron is demonstrated beyond all question by the socialistic shite you peddle .

    But you doubly shame yourself by publicly demonstrating that you are a barrel-scraping, bottom-feeding fool even amongst leftscum.

    Killery isn’t stupid enough to actually believe the shite her gang sling let alone trying to transplant the bollocks across the pond.

  5. It is only a PET if the gift is to another individual. These are chargeable lifetime transfers with a rate of 20% on the value above £325,000. if the donor pays, the rate is grossed up to 25%. Death within seven years will result in more tax.

  6. “Which does rather shade things in favour of the establishment, doesn’t it?”

    Only of they were aware that they would have to pay the tax. As their making a fuss about it now it appears they weren’t so it wouldn’t have affected their decision.

    Not saying I agree with them being taxed, they shouldn’t.

  7. What Ratty said.

    They seem to be confusing a number of issues including IHT and perhaps donations to a political party by companies rather than individuals. Fuck only knows to be honest, it’s journalists.

    This is once again an example of why you should never waste your money getting advice from professional tax advisors such as myself. Why waste a few hundred or thousand pounds getting professional advice from people who do it for a living when you can look something up online, ask your mate down the pub or simply proceed on the basis of some fuzzy long ago half understood half forgotten memory of reading an article in a newspaper. The saving in fees not paid to these so called ‘experts’ is well worth it.

    I’m being sarcastic.

  8. Well, I don’t understand the actual tax reasoning but then that’s not unusual.

    But, presumably there’s a whole load of Remain donors that have received the same bills, and a whole load of donors to the Scottish campaigns that have already paid them.

    Anyone?

  9. ‘This is once again an example of why you should never waste your money getting advice from professional tax advisors such as myself.’

    That there are professional tax advisors* is proof the system is FUBAR.

    *Two of my best friends are tax accountants. My problem is not with the profession, it’s that they are needed to understand the warped laws. Seriously, give money to a campaign and it’s a taxable event !?!?

  10. HMRC and it’s officers have an absolute, ABSOLUTE, obligations to be absolutely impartial. HMRC willnprorely be put to proof that it is being so here.

    This story could get very very interesting.

  11. Ted S. (somewhere in the Catskills):

    In case you hadn’t noticed, “crotchety” is what we pay him for!

  12. Well Ted , obviously my spittle-flecked content can’t compete with gems of down-homespun wisdom from the good folks on Cat-Litter Mountain.

    And it IS tedious going on about 150 million being murdered by a popular death cult.

    Much better to let all that nastiness be quietly forgotten and discuss …er…whatever points you have made . You know.. besides you being bored or whatever.

  13. I suspect an HMRC cock-up rather than conspiracy. But HMRC needs to row back on this decision because of its political implications – which were obviously overlooked by some autistic tax collector.

  14. “Donations to political parties … are usually deemed exempt from tax”
    Are they? Since when? I wish I’d known when I was politically active, that could have been my entire tax bill wiped out by funding my political campaigns instead.

    Or do they mean that the recipient doesn’t pay income tax on the income from donations if the recipient is a political party? Well, that sounds exactly like any other corporate entity, you pay tax on your profits, not your income. And political parties do, yes, make zero profits.

  15. Why is it not a level playing field, doesn’t it apply equally to both sides of the referendum campaign?

    The law appears to be quite clear, referring explicitly to *political parties* with further qualification.

    I believe that this blog doesn’t approve of retrospective changes to the law. I for one might have donated more is I had known that the rules were to be changed as JRMogg seems to want.

    Whilst researching this, I found this in Wikipedia. Might need correcting:

    “In 2016 published letters and a prominent article in The Guardian by a leading accountant supported by Jeremy Corbyn criticised the tax-exempt”

    https://en.m.wikipedia.org/wiki/Special:MobileDiff/799967115

  16. The big question is, have any of the people in this article about donations to the two sides in the Scottish referendum received similar demands for cash?

    http://www.bbc.co.uk/news/uk-scotland-scotland-politics-25404408

    Particularly the couple who won all that money on the euromillions, who gave £500k each to the Yes campaign. They would seem to be identical cases – private individuals giving to a referendum campaign, each donation being over the £325k IHT allowance.

  17. Jgh some expert will no doubt come along but for this purpose I believe a gift is not taxable if it is intended to fund normal activities of a political party, such as running a campaign

  18. The law is clear. Section 24 Inheritance Tax Act 1984 exempts gifts to political parties who won 2 or more seats at the last General Election, or who won 1 seat and a total of 150,000 votes. Gifts to the Remain or Brexit campaigns were not gifts to political parties, and so were chargeable lifetime transfers.

  19. “Gifts to the Remain or Brexit campaigns were not gifts to political parties, and so were chargeable lifetime transfers.”

    So did any donors to the Scottish referendum campaigns receive such bills?

  20. If section 24 applies then donations to UKip or the Green Party when they didn’t have an MP should be chargeable to tax. This could get very messy

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