Lord Ashcroft, who effectively owns the Tory party, hit the headlines as he admitted that he didn’t live here in order to avoid paying tax.
By becoming “non-domiciled” for tax after accepting a peerage, Ashcroft saved an estimated £100 million. Ashcroft is described as a “Belize-based businessman”—but he doesn’t pay any tax there either.
There are about 120,000 non-doms registered in the UK. All they had to prove to maintain their non-dom non-resident status was show they had spent fewer than 90 days in the UK in any one year.
From 2008, non-doms living in the UK do have to pay tax on overseas income if they’ve lived here for seven out of ten years. But they buy their way out if they pay a £30,000 fee.
TUC figures show wealthy individuals and big business avoided £25 billion in tax in 2008. Some £3.8 billion of that tax is from non-doms.
And even the ones who do admit living here don’t pay much tax—a third of Britain’s top 700 companies haven’t paid any tax at all.
No one is sure how much money is deposited in tax avoiding bank accounts around the world, but the International Monetary Fund reckons it is over £4.6 trillion.
And it’s not just individual bosses. All the major high street banks have branches in offshore tax havens—including the likes of RBS and Lloyds that we have spent billions bailing out.
At the same time accountants like KPMG advise the bosses on cutting jobs—and aid them in hiding their profits. So you can own steel plants, gold mines, oil wells and not pay any tax at all.
You can even lodge the money in a bank office in London we paid to bail out, and then say it is an offshore account and never pay a penny in tax.
But only if you’re rich.
Of the £188 million raised by political parties between 2001 and 2008, some £17.5 million came from those who had declared themselves to be “non-domicile”.
All three main parties have benefited. Labour took £8.9 million from the likes of food tycoon Sir Gulam Noon, Lakshmi Mittal and Sir Ronald Cohen, the godfather of private equity.
The Tories got £5.6 million from, among others, disgraced newspaper baron Conrad Black, Tetra Pak tycoon Hans Rausing—and Lord Ashcroft.
Even the Liberal Democrats have their donors Bhanu and Dhruv Choudhrie.
So it’s no surprise that when a law limiting non-dom party donations to £7,500 per year went through, the government delayed it until after the next general election.
Labour’s non-dom donor
Labour’s non-dom donor Lord Paul has a stash of £500 million—but pays no tax. He gave more than £400,000 to Labour in 2007 alone.
Paul made his millions through multinational steel conglomerate Caparo.
Back in 1989 Caparo steel took control of Armstrong Engineering.
The company’s pension fund was just over 30 percent in surplus.
Under Lord Paul’s control Caparo then spent the better part of a decade refusing to top up the fund.
By 2000 the pension trustees and accountants recommended the company put £2 million a year into the pension pot to plug the gap.
Caparo never made a single payment. In 2002 it froze its final salary pension scheme.