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Labour wants you to pay more tax. But what about its tax bill?

30 July 2014

8:53 AM

30 July 2014

8:53 AM

Westminster has got in a tizz overnight because Andy Burnham has been taped saying that he still favours a ‘death tax’ of 10-15%, on top of 40% inheritance tax, to pay for social care. Burnham concocted a similar plan before the last election, only for Gordon Brown (even dear old Gordon Brown recognised a loser) drop it. Guido has a recording of Burnham’s comments, which were made at the Fabian Society’s Summer Conference in June.

Burnham was musing aimlessly, rather than articulating party policy. But, that said, one might easily draw the conclusion from this and other musings, such as Harriet Harman’s views on sports betting and football, that Labour has a rapacious attitude to your money.

In view of the above one would expect Labour to be paying lots of tax. But, on the contrary, the Financial Times reports that the latest figures show that Labour paid only £14,000 in tax last year (versus the Tories’ £187,000) on total income of £33.3m (versus the Tories’ £25.4m and the Lib Dems’ £7.3m – the Lib Dems paid just £14 tax).

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Labour says that it does not owe more corporation tax because it didn’t turn a profit. Tory spinners suggest that darker practices are at work.

I expect that most Spectator readers will commend Labour for being fully aware of its tax liabilities; careful tax planning is what smart people and organisations do. But Labour sees the broad issue in different light. For example, here’s Ed Miliband on Google’s tax arrangements:

I can’t be the only person here who feels disappointed that such a great company as Google, with such great founding principles, will be reduced to arguing that – when it employs thousands of people in Britain, makes billions of pounds of revenue in Britain – it’s fair that it should pay just a fraction of 1% of that in tax. So when Google does great things for the world, as it does, I applaud you. And when Google goes to extraordinary lengths to avoid paying its taxes, I think it’s wrong.

So wrong, Ed.

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Show comments
  • John Moss

    It’s a question of principle. Labour’s sheer incompetence created a long and complicated tax code which created the loopholes which allow “avoidance” to happen.

    They are now trying to make this “immoral” because it isn’t illegal. If they had any principles, they would say what should be illegal, but they don’t, so they can’t.

  • Virgil Caine

    The tax liabilities of an organisation are not calculated on its income, It’s calculated on profit remaining once expenses and costs have been subtracted from income. Labour may well have an income of £33 million, but if their expenses are £32.5 million, then there is only £0.5 million worth of taxable income. Therefore, unless we know the amount of expenditure as well as income, then we don’t know whether the amount of tax Labour pays is acceptable or not.

    • LB

      But that isn’t what Labour is saying about Starbucks or Amazon is it. They mention the Turnover figure

  • Holly

    Someone on LabourList reckons that it is wrong for the Tories to call the proposed money grab from the dead the ‘death tax’, it should instead be called the ‘Personal Care Subsidy’.
    Funny that for the last few years, they think the polar opposite when it comes to spare bedrooms.

  • mandelson

    A small postage stamp moustache would look good on Millipede in the photo.

  • saffrin

    Labour’s Bliar, Brown and Livingstone have all been proven tax dodgers.
    Always happy to spend your money on their good causes but not their own.

  • Conway

    … one might easily draw the conclusion from this and other musings … that Labour has a rapacious attitude to your money.” Anybody who doesn’t know that Labour has a rapacious attitude to our money, must have been living in a cave far away for the last 70 years!

  • Colin

    Why on earth is burnham still in any kind of public office? Why isn’t this useless, sneering clown vilified wherever he goes?

    Nothing but dog whistle nonsense, aimed at it’s core vote – AKA those who don’t actually contribute.

  • Makroon

    “Labour has a rapacious attitude to your money”.
    No, really ?
    Shurely Shome mishtake ossifer.

  • lgrundy

    A national scandal that should be front page news.

    • Inverted Meniscus

      Yes I bet the BBC is lining it up as the lead story tonight. Not. Now if it was the Tories…

  • Jock

    Taxed when earned, taxed when spent, taxed when saved and taxed on death – x 2 if Burnham gets his way.

  • Amir

    Check my interview with Norman Lamont over Labour, the immigration, Europe, economy, reshuffle and Scotland:

    http://www.casualpolitics.co.uk/2014/07/lord-norman-lamont-speaks-to-casual-politics/

  • Smithersjones2013

    Ed Miliband Lying Hypocrite. Well who’d have thunk it [Yawn]

  • David B

    There are a number off issues that need to be considered when looking at tax.

    1. Tax is paid on profits not turnover. A company can turnover £100m but make a loss. – just look at the banks over the last number of years. If the company is in a loss making situation then tax is zero. There is an old saying – Profit is for vanity Profit is for Sanity. Turnover is irrelevant to tax
    2. Profit for tax purposes and profits for accounting purposes are different – over the years HMRC have developed rules for the calculation of profits for tax purposes that are different to those used in accountancy. Mostly these rules result in tax profits going up, but that is not always the case. Therefore a company can make profits that are not taxable
    3. Losses from previous years can be offset against current taxable profits
    4. Profits from outside the UK are taxed outside the UK

    Labour seem to be able to apply these rules to themselves, but when they are looking for headlines they forget to apply them to other people

    • Aberrant_Apostrophe

      On #4, I thought Gideon was bringing in a rule that companies could offset losses made overseas against their UK tax liability?

      • David B

        If a company sets up an office in a foreign country operating as a branch office (not as a subsidiary company registered in the foreign country) then the profits of that branch are subject to UK Corporation Tax (less any double tax relief).

        All that is happened is he has evened up the tax treatment. If the profits are taxable, the loses should also be available for relief.

    • Andy

      Yes but all these points are never made by the Fascist Labour Party, so the same rule applies to them. It must be Tax Avoidance and Evasion. They are guilty. Lets pass sentence.

      • David B

        I think a better question is if Labour know these rules exist why do they deliberately miss represent the position of others.

        Are they deliberately trying to mislead the public or are the politicians and special advisors at the head of the party so incompetent they don’t know the rules while the administrators run the Labour part do. If either is the case then Labour should be banned from public life, after all they passed most of the tax code we currently have

        • Andy

          If, as they do (such as Margaret Hodge) accuse Amazon, Google et all of Tax Avoidance then that same charge can and should be made at them. They have deliberately avoided tax, so lets see the Public Accounts Committee examine their affairs and pillory their staff.

          • David B

            I would agree with you that Mrs Hodge personal and business affairs should be investigated in full by the public accounts committee. She should then be put at the bar of the HOC and made to explain how she failed to apply the same rules to herself that she apply to others

            • LB

              And Miliband

              Labour paid only £14,000 in tax last year (versus the Tories’ £187,000) on total income of £33.3m (versus the Tories’ £25.4m and the Lib Dems’ £7.3m – the Lib Dems paid just £14 tax).

              • David B

                The reason for this is the way taxable profits are calculated but when others use the same rules they call it tax avoidance and suggest there is something wrong.

                “Do as we say not as we do” Sums them up!

                • LB

                  Leona Hemsley all over again

                • David B

                  “only the little people pay tax”

                  I wonder what Ed’s thoughts on IHT are?

                • LB

                  It’s for other people to pay.

          • LB

            Labour paid only £14,000 in tax last year (versus the Tories’ £187,000) on total income of £33.3m (versus the Tories’ £25.4m and the Lib Dems’ £7.3m – the Lib Dems paid just £14 tax).

  • HookesLaw

    Under Labour nothing is certain but death and taxes… and taxes on death.

  • Alexsandr

    Labour have had a good role model with the dodgy finances of the Guardian Media group.

    • Tim Reed

      …and the Co-op.

  • vircantium

    You forget how the lefty rules work in relation to debates on tax. YOU dodge tax and thus are immoral, WE reduce our tax bill in a legal way and anyway our hearts are in the right place. It’s a lefty form of Taqiyya.

  • http://batman-news.com The Commentator

    If you have worked hard and saved all your life Labour want to use the tax system to steal your money and give it to someone who didn’t. Apparently this is called social justice.

  • fathomwest

    The three parties, Conservative, Labour and Lib Dems can only ever think of new ways to tax the people. Not one of them gives any promise to reduce taxation. The tax on fuel, motoring and transport, are a National disgrace. When one adds up all the other forms of taxation, such as television license, driving licence, road tax (Now Vehicle Excise Licence, Value Added Tax on almost everything, inheritance tax, now death tax. savings, holiday tax- if you fly! the list of the governments grip on OUR money is endless. Any reduction in one is soon swallowed up by a change in another.
    When a party comes along promising to rewrite and reduce ALL taxation they will sweep the board.
    BU

    • Colonel Mustard

      And the galling thing is that a lot of that tax pays the 30% odd per cent of the country who vote Labour and boss us around.

      • HookesLaw

        According to the ONS — The percentage of people in employment who work in the public sector is at the lowest since records began
        For September 2013
        there were 5.7 million people working in the public sector across the UK
        accounting for 18.8% of people in employment.

        Job losses continue in the public sector. Only under a conservative govt of course. Vote tom let back in Labour and all that will change.

        • Alexsandr

          but they just outsource the jobs, then they look like private sector. Our bins are emptied by a private company. but they are doing government work, paid for out of taxation.

          Its real cuts in spending thats needed. And that has not gone far enough.

        • Colonel Mustard

          The 30% odd (and they are odd) will includes the Quangocracy, fake Charitocracy, BBCocracy and Luvviedom as well as all the “Associations” engaged in the immigrant trade.

    • Conway

      You forgot insurance premium tax on car insurance.

  • JamesChambers123

    Sounds like Labour have been studying the Starbucks play book…

  • DaveL

    The Labour party pay 0.04% income tax. A Labour policy I would vote for!

  • BarkingAtTreehuggers

    Listen chaps, here’s the thing: it is only ten months to the next GE, Britain is *now* spending like crazy again, just the medicine Broon prescribed a year before he was ousted. Look around you: if you see no activity then you are clearly not considered worthy.

    There is no point denying it – Britain’s current account balance remains DEEP RED.
    There is no point denying it – Britain’s annual gove’mint deficit remains DEEP RED.
    There is no point denying it – Britain’s interest rates are what they are.
    There is no point denying it – Britain’s homes are one of the only few assets left. Their prices must rise.
    There is no point denying it – immigrants will bring more of the much-needed cash. They will fund every single major infrastructure project in Britain we can think of, be it the
    Shard, any major power grid and plant infrastructure, London Asia Ports, high speed rail, Manchester Airport City, Hinkley C, the Crystal Palace Project, accommodation at Battersea Power Station for luxury sardines and so on and on.

    In this context, how could you possibly contemplate funding anything?
    In a property and land value bubble: tax the property and land, not the income.

    • Colonel Mustard

      Nice deflection. Do you get paid by the word?

      • BarkingAtTreehuggers

        “I expect that most Spectator readers will commend Labour for being fully aware of its tax liabilities” — apparently that hurts when examined in detail.

        n.b. would you like to contribute or contribute financially? IBAN details to follow.

        • Colonel Mustard

          Apparently you do.

          • BarkingAtTreehuggers

            Apparently that’s what makes you tick. Money, not content.
            Why am I not surprised?

            • Inverted Meniscus

              Because you are a barking mad socialist nutter with a menagerie of gibberish spouting sock puppets lad.

            • Colonel Mustard

              You survive without money? How quaint.

      • Inverted Meniscus

        Yes the EU are very generous with our money.

    • Holly

      There’s no point denying it – DEEP RED Labour DO NOT PAY their proper share of tax.

    • HookesLaw

      Britain is not spending like crazy again – only the other day the Spectator quoted a link pointing out how spending was being reduced.
      http://www.economicsuk.com/blog/002037.html#more
      ”If we take public spending, which is where the chancellor gets it in the next from his right-wing critics, the striking thing is not that that spending has been relaxed but that it has been tightened – cut – relative to the 2010 plans.
      According to those plans, the government intended to spend £722bn in the 2013-14 fiscal year, that one that ended this spring. In fact it spent £714bn.
      Spending has been lower each year than set out then. Public sector current spending was originally intended to be £679bn in 2013-14. In fact it was £668bn. Unusually, for any government, spending has come in comfortably within budget. There has been no slippage.”

      I’m pretty sure you saw that link mr Barking — so its sad to see you spouit a lie. it makes you no different from Ed Miliband.

      • Alexsandr

        its not spending against budget thats the problem. pretty hard to hit a budget because of external factors
        its the budget thats too high.

      • BarkingAtTreehuggers

        A quote from your link:
        “Where there has been slippage is in tax receipts, which have been weaker than expected.”
        Now, let’s see what figures come in in April 2015, shall we?

        • Inverted Meniscus

          And show them to the Goat lad?

  • anyfool

    Anyone who is so stupid as to believe that, if Labour are elected there will not be massive increases in tax across the board, really do need their heads examined.
    They will increase all taxes especially council tax, given time they will leave you barely enough to pre pay your funeral.
    They will steal the pennies from your eyes.
    It really is frightening when you do not have a financial moron like Brown to veto the wackiest ideas that Balls proposed last time.

    • Colonel Mustard

      They will very carefully tax all those with no collective voice, avoiding their “shadow government” of public sector “workers”, quangos and fake charities. Expect plenty of demonisation and stock phrases like “It’s right that X should pay more…”.

      Their cultural revolution is almost complete but they still have the economy to deal with and that could be messy with the country as a live guinea pig for the front bench crazies deranged experiments, inspired by Marxism, rooted in spite and grievance.

      The likelihood is that as the mess is compounded they will play the authoritarian card. Every hard line socialist regime has done so. And be under no illusions that Kim Jong Ed’s gang is anything other than hard line socialists motivated by Marxist dogma.

      • fundamentallyflawed

        If the conservatives want to win they need to aggressively pursue the labour will tax you more headline. Of course Labour will say they will protect the vulnerable (through more benefits of course) but anyone who earns more than 20k (and wishes to own their home, retire and leave something for their children) should be very worried about another 5 years of labour.

        • HookesLaw

          They are doing
          http://www.dailymail.co.uk/news/article-2710287/Labour-revives-plans-15-death-tax-estates-deceased-provoking-outcry-Tories-claim-pensioners-deserve-better.html

          What sickens me is that right wing idiot tory backbenchers (and traitors in UKIP) attack their own party rather than Labour.

          • Smithersjones2013

            Yet you expect people who you abuse as ‘ traitors’ to vote for those ‘idiot Tory’ backbenchers?

            Why would anyone want to vote for a clearly broken party or your deranged view of the UK as some vacuous province of the Brussels Imperium?

        • GraveDave

          I knew a villain who told me at the time of one up coming election (and this was back in the 80s) that he is going to vote Tory. And when I looked at him he said, well I’m a thief, and if I vote I vote for the thieves doing the best job.
          It took me years to understand this bit of wisdom.

          • Colonel Mustard

            I knew plenty of villains. They sat on the government benches from 1997 to 2010. They were thieves and stole plenty of money too. They also stole our liberty.

            • GraveDave

              Whataboutery….But if you’re going to vote for thieves, vote for those who have been doing it for over a thousand years. And you even now thank them for it.

              • Colonel Mustard

                Whataboutery? Yes indeed. The article was about Labour’s tax plans and you brought up a ridiculous anecdote of no merit or relevance about the Tories.

                GraveDave (whining): “Whaaaaaaatabaaaaaaht the Tories, blah, blah, blah”

                • GraveDave

                  No, you did the whining. I don’t blame the parties. I blame their idiots .

                • Colonel Mustard

                  I blame the parties and their idiots of which you are a prime example.

                • GraveDave

                  Lol, you really want the last word don’t you. I more or less just just told you (as in previous posts), I didn’t vote for either of the idiot parties we’re talking of.

                • Colonel Mustard

                  You can have the last word…

        • Inverted Meniscus

          Should that be 5 minutes of Labour. Don’t think it would take Fascist Labour and its Marxist headbangers 5 whole years to destroy Britain economically and culturally.

      • mandelson

        Dont forget those with “broadshoulders” ha!

  • Holly

    Sugar…sussed…moderated.
    Try again…

    By George, an @rse b0rn every day, it would appear.

    Fitting

  • Colonel Mustard

    The revelation about their tax affairs is really shocking, especially considering how much they preach to and smear others about it.

    If it was the Tories we’d never hear the last of it. Expect the BBC to try to bury this one as quickly as possible.

    • MikeBrighton

      Never forget this number, Labour’s effective tax rate is 0.042%, which is actually lower than famed tax avoiders Apple (etr 0.05%), Vodafone (25.3%), Starbucks (32% globally and 0% in the UK, a little less than Labour’s) and Boots (15.6%). Are UKUNCUT on Labour’s case…I doubt it.

  • Holly

    Image does matter.

  • George_Arseborne

    Is this article not stupid? How did the Tories raise their funds? Always in a dodgy way through Russian oligarchs who are cronies to Putin. Remember dodgy Dave playing with dodgy Boris to entertain a woman marry to… You complete it.
    They should pay more as a matter of fact, their funds are too dirty

    • starfish

      Yup

      Soooooo much better to be funded by producer interests in the public services

    • Holly

      This is what totally bugs me!
      Where is your proof that the wife of the Russian bod IS a crony to Putin?
      Where is your opinion on Labour’s measly amount of tax they paid on £33.3m?

      This is what ALWAYS happens when Labour are shown to be hypocrites, rubbish, or unfit to run a bath.
      Instead of being angry/upset/annoyed by their bare-faced hypocrisy(this is that polar opposite trick again) all you, and others can do is insinuate that everyone else is ‘dodgy’, when in fact the only people being shown to be tax avoiders here are Labour.
      The Tories raised their funds from wealthy donors just the same as Labour do. The only difference is, the Tories believe that they should pay the taxes due …..Labour on the other hand….Don’t.

      As a PS.
      I hope this goes viral!
      GUIDO!!!

    • Inverted Meniscus

      Silly person.

    • Colonel Mustard

      No, this article is not stupid. Your comment, however, undoubtedly is.

    • Andy

      You really are an arse*ole. Like that silly Labour cow on Any Questions who made a similar claim but when challenged by Dan Hannan couldn’t name a single person – it was a gross slander and the idiot Dimbleby had to jump in to rescue her.

      • George_Arseborne

        So what knuckle head. You`re just a silly Tory Sheep. Better?

        • Andy

          But you’re just a stupid Labour Fascist.

        • Colonel Mustard

          But a Briton for all that…

  • CharlietheChump

    Labour hypocrites shock horror

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