Tory donor 'kips in private jet' to avoid paying tax: INSIGHT [Edition 2]
Sunday Times [London (UK)] 08 Apr 2012: 11.
THE LOBBYIST at the centre of the cash-for-Cameron scandal claimed that a Tory
donor avoided tax by leaving his home in the evening to spend the night in bed
on his private jet.
The millionaire donor is said to have routinely flown out of Luton airport at
the end of the day so he could sleep outside UK airspace before returning home
in the morning.
This allowed him to extend the number of days he could stay in Britain without
paying tax. As a non-resident he could spend only 91 full days in the country
Since 2008, the tax authorities' "midnight rule" has applied to anyone who is
still in Britain at midnight on the 91st day.
The ruse was revealed by Sarah Southern, a former aide to David Cameron, during
a dinner with undercover reporters in Zurich earlier this year.
She said the donor would often skip out of the country overnight to avoid tax.
"I love that 90-day thing ... because it's a full day," she said. "I know
someone who will sometimes get on his jet and fly out and fly back in after
midnight. So he's not been there for a whole day."
The lobbyist, who was caught selling introductions to the prime minister, had
worked as a Tory aide for seven years.
She said the donor was so wealthy that it was worth his while making flights to
nowhere to avoid his enormous tax bill.
With a fortune like his, she said, "you can sleep on your jet three times a
week. You can do whatever you want. The world literally is your oyster".
Southern explained that a helicopter took the donor to Luton airport where he
stepped straight onto his jet to retire for the night in an onboard bedroom.
Before 2010, days travelling in and out of the country were not counted under
the 91-day rule.
The donor could therefore have saved two days with one overnight trip.
The guidelines have since been changed by HM Revenue & Customs to include the
days that a non-resident is in the country at midnight, even if they have just
travelled into Britain that day.
Southern said she believed the donor's tax arrangements may now have changed.
George Osborne, the chancellor, has branded aggressive tax avoiders as "morally
repugnant" and has warned tax cheats that the government "will find you and your
However, principal benefactors to his party have often been dogged by questions
over their tax affairs.
Peter Cruddas, the former Tory party co-treasurer who was forced to resign last
month after he was filmed selling meetings with the prime minister for Pounds
250,000, made his fortune by avoiding taxes on financial transactions.
The spread-betting tycoon told undercover reporters how his firm, CMC Markets,
got around tax rules legally by classing transactions as "bets" rather than
"That's my claim to glory," he said. "If you bet on something in the UK you
avoid capital gains tax and stamp duty."
- posted 8 years ago