Mr Miliband’s burgeoning post-ministerial income is siphoned into the company owned with his wife, called The Office Of David Miliband Limited.
Tsk, eh, tsk!
Financial analysts say the tactic is usually deployed to reduce a joint tax bill by taking income in the form of share dividends and exploiting both partners’ tax-free allowances.
Well, no, it\’s not really about personal allowances, not for a two professional family. It\’s about employers\’ national insurance.
If the money goes into a company, pays corporation tax, that c tax is imputed to the dividends and then income tax is topped up to higher rate then it\’s all much of a muchness for the total inome tax bill as against just declaring it as income in the first place.
However, take it as dividends and the employers\’ NI does not have to be paid, saving some 13 or 14%.
So we look forward to the Ritchie piece denouncing this egregious tax abuse. For that\’s how he so described these actions in a report for (I think) the TUC.
Of course, when Ritchie was earning well he used this dodge himself but now he\’s on a grant from the Rowntree folk he\’s pure and so above criticism.
But consistency does mean that he should condemn this behaviour, no? And so we wait…..