Despite being a Conservative Parliamentary Candidate last time round, as a financial adviser I commend the Labour Party's sensible strategy for eliciting a donation from John Mills. It is not wrong and far from it. The rules were put in place for particular encouragements deemed desirable by those who put them there. If they are felt to be undesirable, then that is what must change, not the sensible principles of tax avoidance.
We should all avoid tax where it is legitimate and fair. Now, before I am shot down in flames by socialist zealots, they might need to consider the tax relief they secure on such things as their own Pension contributions, Charitable donations and Professional subscriptions. Of course, for those in business, even considering the abhorrence of securing tax relief on expenses incurred in the furtherance of a trade would be investigated!
Tax avoidance is good and prudent stewardship for us all. However, that does not extend to multinationals which are abusing the principles of the law even if they can cheat its letter. There were rules about 'translation pricing' decades ago and these should be tightened dramatically. On the other hand, tax evasion is fraud and should be punished severely. Tax evasion is illegal. Avoidance is legal and should be encouraged, especially if the reasons for its existence have a positive purpose designed to encourage taxpayers to take particular courses of action which are deemed positive for the Country in some way. Bizarre film scams or other routes should have failed before now anyway as abusing the general principles behind tax legislation.
Of course, what is embarrassing is that Ed Miliband doesn't seem to understand the distinctions and then the Labour line refers to paying tax on the dividends from the shareholding... that isn't the point (as no-one can reclaim the 10% dividend tax anyway as it reflects an element of the Corporation Tax the business has already paid...). It's like being given a £1million pound vehicle fleet tax free and saying that paying tax on the petrol is the same!
Thing is too, as an unquoted company, will Labour ever be able to sell its holding in JML I wonder... and then could they be accused of imprudence by keeping so much money in just one holding? Not very diverse is it! Technically, if say JML went bust, the 'trustees' could ostensibly be sued by being negligent. Oh what fun and all from good intentions Mr Mills!
