Political insiders benefit from tax break on UK party giving
By Tom Bergin LONDON (Reuters) - When British businessman Robert Durward decided to spend 1.9 million pounds ($2.9 million) funding a new free-market political party in the mid-2000s, friends said he was wasting his money. Years after his "New Party" collapsed, he agrees, telling Reuters it was "a complete and utter waste of time." But in one way at least, Durward was more astute than his friends gave him credit for. That's because, rather than donating the money personally, he gave via his company, Cloburn Quarry Company Ltd. "You're paying less tax if you're putting it through the company," he said. Funding the party through his company was perfectly legal. It saved him - and cost the taxpayer - hundreds of thousands of pounds. Between June 2005 and December 2014, at least 41 million pounds of political donations analyzed by Reuters were given in this way - 39 million pounds of it to the four main parties - in a tax loophole that Reuters is the first to measure. Forty percent of the total was given by companies in which politicians, party officials or their families have a significant stake. Seven candidates in elections due in May have benefited from donations by companies they or their families own. Two of the seven, Michael Foster and Glasgow candidate Anas Sarwar, are Labour Party members. The others - Health Minister Jeremy Hunt, North West Leicestershire candidate Andrew Bridgen, Devon candidate Anne Marie Morris, Cheshire candidate Edward Timpson and Lancashire candidate Seema Ghiassi Kennedy - are Conservatives. Hunt said he complied with electoral law. The others declined to comment or did not respond. Between 2005 and 2014, some of the most generous companies in Reuters' analysis were controlled or heavily influenced by individuals who were, or would become, members of the upper house of parliament, the House of Lords. Lords Waheed Ali, Michael Ashcroft, Anthony Bamford, Robert Edmiston, Andrew Feldman, Philip Harris, the late Edward Haughey, James Palumbo, Alan Sugar, Ranbir Suri, Greville Howard and Rumi Verjee have, combined, contributed 13.7 million pounds to political parties through companies they either significantly or wholly owned. Over the same period they gave just 1.2 million pounds personally. A spokesman for Verjee said tax was not a consideration in his donations. A spokeswoman for Ashcroft said: "He cannot even hypothetically see where, as you described, there are tax advantages and if you can he would be curious to discover what he missed." Reuters provided details of the calculations on April 17. She responded, "We have no time to go through it and obviously no reason to do so." A spokesman for JCB, which is owned by the Bamford family, said there was no tax benefit to Bamford in another of his firms, JCB Research, giving 3.8 million pounds to the Conservative Party. This was because Bamford, the sole shareholder of JCB Research, was separate from the company, the spokesman said. "Political donations made by JCB are corporate donations made by the company, not through the company on behalf of Lord Bamford or any other individual," he said. The other Lords either declined to comment or did not respond. (Edited by Sara Ledwith)
