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Ed Miliband should repay £1.5Million tax avoided on major donation

Labour not avoiding tax on shares donation - Ed Miliband

http://www.bbc.co.uk/news/uk-politics-22793181

Quote:

Ed Miliband has said a donation to Labour in shares was designed to provide a "steady income" for his party, not to avoid tax.

He said the party would pay tax on dividends from the shares worth £1.65m.

Millionaire businessman John Mills said the idea of giving shares rather than cash came after discussions with the party and avoided a big tax payment.

According to figures released by the Electoral Commission in May, Mr Mills' donation was effectively the largest to the Labour Party in the first quarter of 2013 - twice that of the Unite union.

But it was made in shares, not cash. The founder and chairman of shopping channel JML told the Daily Telegraph his approach had been the "most tax-efficient way" way of making the donation.

He told the newspaper: "Otherwise, you get no tax relief on donations to political parties for understandable reasons.

"If you donate to a political party out of a tax-paid income, up until April it [the tax] was 50% and now it is 45%. That means if it is £100,000, the Labour Party gets £55,000 and the government gets £45,000."

The former councillor, who is the brother-in-law of Labour former cabinet minister Tessa Jowell, added: "It came out of a discussion I had with them [Labour] about the best way of doing it.

"It is quite a good model. Labour has got people who deal with compliance and the legal side of all this. They are very sensitive nowadays."

The shares deal meant Labour would receive a regular annual income in the form of dividends. If the sum had been paid as a cash dividend rather than shares, Mr Mills would have had to pay £724,710 in dividend tax, the Telegraph said.

Labour said it was grateful to Mr Mills for his support, that his tax affairs were a matter for him and that the donation was in line with party funding rules.

Mr Miliband, asked about the donation after his speech on welfare, said: "The reason John Mills gave us these shares is because he wanted the Labour Party to have a steady stream of income, which we will get from dividends.

"The Labour Party will be paying tax on these dividends, will be paying tax every year on these dividends, and that is what we will be doing."

He added: "Lots and lots of organisations receive donations on this basis. I don't know whether George Osborne is going to be writing to all those organisations that receive shares in this way to say they somehow have got to pay back whatever money he is talking about."

Dividends are payments to shareholders that a profitable company can decide to make - they are typically paid each year and are a fixed amount per share, but can vary from year-to-year in line with the firm's trading and profit performance.

The Electoral Commission said it had been contacted by the Labour Party prior to the donation and using shares to provide such funding was allowed.

So Labour will be paying tax on the income - seems fair enough ..... :pipe:

I wonder how many Tory Party backers are adopting the same mechanism ..... :suspect:

Ch4News just said he never gave answers
after his talk.

We will see what Stinking Labour is doing
in tomorrows papers.

Ed M is hated by so many in the UK

Normally I would agree it should be paid back but if it's so that what Ed Miliband said about this today and also that Labour will be paying tax on the running donation then that is fair enough for me.

I would expect it may be better for the Conservative party to play this down a little more actually, it may well be they open up another can of worms if they push this too hard.

Quote:

Originally Posted by joeysteele (Post 6038380)

Normally I would agree it should be paid back but if it's so that what Ed Miliband said about this today and also that Labour will be paying tax on the running donation then that is fair enough for me.

I would expect it may be better for the Conservative party to play this down a little more actually, it may well be they open up another can of worms if they push this too hard.

Not all of it
Hence Ch4News not getting a answer

Well it seems all this was cleared by the electoral commision anyway,so athough it may not be the completely best way to conduct things,there is in fact very little to answer really.

I doubt very much Labour are the only ones to have donors doing this too.
The funding of the Parties is an issue that needs looking at definitely but to avoid things like this and other far worse donations being made, then they will need to be funded by the taxpayer and I cannot see the voters accepting that.

Even the Conservative MP on QT last night indicated nothing was legally wrong with this donation and how it was being made.

Of course it isn't, just another smokescreen this to hide the conservatives dodgy insider dealings .....