Monday, March 01, 2010

Michael Ashcroft Clarifies His Tax Status

Michael Ashcroft has this morning made a statement on his website clarifying his tax status...

I am making this statement in advance of the release by the Cabinet Office of limited information about the award of my peerage and of the undertakings I gave at the time. While I value my privacy, I do not want my affairs to distract from the general election campaign. I have therefore decided to release a copy of the letter which I wrote to William Hague, and to expand on what actually happened.

As the letter shows, the undertakings I gave were confirmed in a memorandum to William Hague dated 23rd March 2000. These were to "take up permanent residence in the UK again" by the end of that year. The other commitment in the memorandum was to resign as Belize's permanent representative to the UN, which I did a week later.

In subsequent dialogue with the Government, it was officially confirmed that the interpretation in the first undertaking of the words "permanent residence" was to be that of "a long term resident" of the UK. I agreed to this and finally took up my seat in the House of Lords in October 2000. Throughout the last ten years, I have been declaring all my UK income to HM Revenue.

My precise tax status therefore is that of a “non-dom". Two of Labour's biggest donors - Lord Paul (recently made a privy councillor by the Prime Minister) and Sir Ronald Cohen, both long-term residents of the UK, are also "non-doms".

As for the future, while the non-dom status will continue for many people in business or public life, David Cameron has said that anyone sitting in the legislature - Lords or Commons - must be treated as resident and domiciled in the UK for tax purposes. I agree with this change and expect to be sitting in the House of Lords for many years to come.

A Conservative Party spokesman has reacted by saying: "David Cameron has said that he respects people's privacy but he is pleased Lord Ashcroft has made this decision. It is clear therefore that Lord Ashcroft has the same status as several Labour donors including Lord Paul - recently appointed to the Privy Council on the recommendation of Gordon Brown's Government."

It will be interesting to see how people react to this news. The demonisation of Lord Ashcroft will no doubt continue in some parts of the media, egged on by partisan Labour politicians. It's no doubt water off a duck's back. The Independent on Saturday carried a long feature about the amount of money given to marginal seats by Lord Ashcroft, but it rather backfired as the figures show that only 18% of the money spent in the marginals was donated by Lord Ashcroft, with 82% raised by local candidates and Conservative Associations themselves.

Declaration of interest: Lord Ashcroft is a minority shareholder in my two companies, Biteback Media & Biteback Publishing


Paddy Briggs said...

"I have been declaring all my UK income to HM Revenue."

And the rest of your income?????

Most of us pay tax on all of our income wherever it is earned. That's what being a citizen means. Unless you are rich enough and clever enough to avoid it.

Sean Haffey said...

I think the problem is this: while Lord Ashcroft pays tax here, the status "non-dom" raises questions and implies there are reasons why he is not fully committed to the UK.

I may be misreading this, as I am just a man in the street in terms of myunderstanding of tax law, but it just sounds wrong.

In other words, why is LA a "non-dom" rather than a "dom"?

Letters From A Tory said...

To be honest, Labour have never let 'the facts' get in their way of their hatred and bile towards Conservative voters and supporters - so this definitely is not the last we've heard of the Ashcroft saga.


I notice that you talk about the demonisation of Michael Ashcroft.

Do you agree with David Camerons speech yesterday? How he called Nick Griffin a ghastly piece of filth.

To make such comment not only attacks him but all his one million supporters and voters. Are we all ghastly pieces of filth?

I am glad to see that Mr Cameron promoted the fact of his black candidates. Yet the black candidate for Chippenham did not want to debate with the BNP candidate because he did not want it to be on a matter of race.

Norman Tebbit must be happy with this new multicultural pride Tory party?

As for Enoch Powell, just shows how far the conservatives have changed. Don't be expecting my ghastly filthy vote or of the other million plus british voters anytime in this century.

Cardinal Richelieu's mole said...

Utterly disgraceful to oblige anyone to take up permanent residence in this blighted country.

Prodicus said...

So is it OK to open fire on Lord Paul and Ronnie Cohen now? Or would that cue Labour accusations of racism?

Being more positive, can we expect Labour to shut TF up about Ashcroft now? No? Ah, OK.

the orange party said...

The Ashcroft 'non-dom' attack line is so blatant it is almost laughable. I reckon it bores the pants off voters.

But the pressure is relentless. The issue of a 'non-dom' - any non-dom - bankrolling a political party - any political party - has to be addressed.

Tories are starting to hit back with Swarj Paul. About time. Interesting that Ashcoft has made that very point in his letter.

Maybe it will balance out and fizzle out as an electioneering attack line.

Paul? Ashcroft? Both as bad as each other?

Unsworth said...

@ Paddy Briggs

"Most of us pay tax on all of our income wherever it is earned."

Complete bollox. You really haven't a clue about what goes on this country, tax regimes or anything at all, for that matter.

So, everyone earning anything at all pays UK income tax on every pound earned? You obviously do not understand the difference between avoidance and evasion. You clearly do not understand how international companies operate. Well you're really going to have to shape up if you are going to oversee large pension funds. Take a close look at how they work. You'll be shocked.

Utterly moronic. Maybe you should not let your class and political prejudice get the better of you before lauching into print.

Irene said...

He missed out Lakshmi Mittall for labour.I hope the media now focus on labour's non doms!

DespairingLiberal said...

This proves nothing. What a slippery piece of lawyerly evasion. Does he live here or not? We are none the wiser.

Eddie said...

Osborne will ensure that nobody with an estate of less than £1 million will pay inheritance tax, and it will be paid for by Non Doms.

Labour are against Non Doms paying for this inheritance tax saving for manymiddle class families with homes.

Cameron called for Lords to take up full residency status in the future. Labour dragged their heels on this.

Now we find Lord Ashcroft met the requirements that were placed on him, for so long smeared by Labour, yet he was in the same position as several of their largest donors all along.

Ashcroft has stated that once rules change about Lords and Non Doms, he will continue to be able to sit in the Lords as he will change his tax position to qualify.

Labours Lord Paul ha not yet decided, and may not be able to sit in the Lords...

No wonder Labour dragged their heels. A bit rich to be throwing smears whilst doing so, but I guess that is Browns way.

Paddy Briggs said...


I don’t normally respond to gratuitously abusive postings like yours but just to clarify my post for those like you who seem to be unable to understand a fairly simple principle:

I have income that accrues from work I do in the UK and income that accrues from work that I do aboard. As a UK resident, liable to pay tax here on all of my earnings wherever made, I duly declare all my earnings and pay tax on them.

If Ashcroft was like me, a wholly committed UK citizen, he would do the same as I do – live here and pay tax on his worldwide earnings in Britain. But he doesn’t. That’s his choice and I have many friends who also finesse their residency status in a similar way in order not to pay (in some cases) or to minimise (in others) UK tax. That is their right and it is tax avoidance not tax evasion and I fully understand the difference between the two.

I am also aware that the really clever tax avoiders, like Ashcroft, have a complex structure of companies in place further to minimise their tax liability and that they operate out of tax havens, like the Cayman Islands, in order to do this.

I make no charge against Lord Ashcroft other than that, in my opinion, he is less of a citizen than me, and most other British passport holders, as a result of his tax status.

DespairingLiberal said...

Unsworth, I agree with you, which is why there also needs to be a massive clampdown on the tax avoidance schemes of the large corporates and financeco's and repatriation of tax revenues from offshore. If this was done, Britain would quite literally have no government deficit to worry about.

However, I don't currently expect the Tories to support such a policy, as this would infringe on the "rights" of our wealthiest citizens to offshore themselves and relieve themselves of the irksome responsibility of paying their fair share.

Against that background, how fortunate that both Labour and Conservative Parties are super-funded by rich offshore tax exiles, thus ensuring that nothing at all will change!

Nigel said...

Interesting how, in its lead story, the BBC manages to quote the letter in some detail without mentioning the Labour 'non doms' at all.

p smith said...

Iain, as you know full well it answers little (other than the fact of his domicile status). The Tories have sought for 10 years to mislead the British public that Ashcroft was domiciled in the UK for tax purposes. While they were clever enough not to provide a "cast iron" guarantee of this, they certainly intended to lead us to believe that with their complex series of obfuscatory comments as to Ashcroft "fulfilling all the assurances given" to William Hague on his tax status. What was the purpose of those assurances if not to confirm that he was resident for tax purposes? Of what worth is a commitment by Ashcroft to be a permanent resident in the UK apart from a comcommitant liability to pay UK tax on all his revenue? I couldn't give a f*ck if he has a house in this country in which he spends 180 days a year UNLESS he is paying tax as a domiciled resident.

This is precisely what happened with Dave's commitment on the Lisbon treaty. He used weasel words to mislead the public that his intention was to do one thing when in fact he planned to do another.

And you wonder why the lead is down to 2 points.

As for Paul and other Labour donors, I hadn't realised that Dave's ambition was to be just as bad as Gordon Brown (see the previous paragraph).

Moriarty said...


An interesting, er, essay. In the course of your 5,000 word tribute to yourself you manage to make not one mention of Lord Paul. Why, one might even suppose you were a partisan hack.

But I shouldn't mock. Your initial post was the most stupid I have ever read on an internet forum (and I include the late C4 News one) and therefore required clarification. So thanks for that at least.

Unsworth said...

@ Paddy Briggs

You really need to talk to a decent corporate accountant with some international understanding. Your understanding - as demonstrated by your response - as to the legal requirements, is remarkably limited. Perhaps the pension fund guys might be able to lighten your darkness.

Now, if you wish to have a debate about ethics vs law then that is an entirely different matter.

Unsworth said...

@ Despairing Liberal

You seem to regard tax avoidance as somehow criminal. It is not.

If you wish to change the tax regime so that corporations pay more tax that is a different position and discussion. However, such changes will, inevitably, lead to corporations (particularly international corporations) reviewing their tax liabilities and making decisions as to their domiciliary status. It's a straight commercial decision. So, your proposal is naturally a gamble. The function of a corporation is to look after the interests of its shareholders - and no one else.

Define 'fair share'.

Nigel said...

>>why there also needs to be a massive clampdown on the tax avoidance schemes of the large corporates and financeco's and repatriation of tax revenues from offshore. If this was done, Britain would quite literally have no government deficit to worry about.<<

More likely, we would 'quite literally' have no large corporates and 'financecos' to worry about.

There is a legitimate debate to be had about the tax paid in the UK by large international companies, but idea that 'massive clampdowns' are cost free is a fantasy.

starfish said...

>>why there also needs to be a massive clampdown on the tax avoidance schemes of the large corporates and financeco's and repatriation of tax revenues from offshore. If this was done, Britain would quite literally have no government deficit to worry about.<<

The concept that there is sufficient funds in such schemes to make up for this government's olympian deficit has quite made my day

Thank you so much

DespairingLiberal said...

Of course I don't regard avoidance as illegal Unsworth, since by definition it isn't. I regard the elaborate tax avoidance schemes dreamed up by multi-party mega-donors like PWC, KPMG, etc as profoundly against the interests of Britain and British taxpayers.

Basically they are making mugs out of the rest of us - the tax burden falls on the salaried middle class who cannot leave, whilst those who should by ethical standards be paying are exempted.

This cosy system is not seriously contested by a supine governmental system, partly because of the donation system, partly because of the revolving door between HMRC and the avoidance-planning companies and partly because substantial sections of the media (particularly News International) also support a system which means they pay no tax on their UK operations.

Money made in Britain should be taxed in Britain and not the Grand Caymans.

Alix said...

Why did Unsworth bring up the subject of "corporations" in response to Paddy Briggs' post which was quite clearly about personal tax? I presume someone so ready to bombast others for ignorance is themselves aware of the difference between personal and corporate tax law?

PB was simply suggesting, as I read it, that Lord A *should* be domiciled, and therefore should be declaring all his personal income wherever it arose.

Of course, you can comment on the *should* and suggest that Lord A should be allowed to use the non-dom rules like anybody else. I have some sympathy with that view. I think the case for removing this access for legislators is morally strong, but it's a close-run thing. If Lord A's position is that morally unimpeachable then one has to ask why there's been all the smoke and mirrors? And if (as Lord A states) he agrees with Cameron, why has he not done something about it before now?

Anonymous said...

Labour hypocrisy meets Tory smugness: 'Aren't the toffs awful' versus 'Well, we're all crooks so that makes us even'.

Listen to Cameron's comment this morning: that latter above is effectively what he said....followed by "So I think that clears that up".

It does indeed.

The Slogger

Unsworth said...

@ Dspairing Liberal

I might have some sympathy with your broad general view. However, taxation laws - in their increasing complexity (and imbalance) are devised and brought in by elected legislators. It's clear that those who scrutinise the legislation and its application do so either inadequately or with deliberate bias. In any event, any law has its weaknesses.

I do not regard Ashcroft's silence as morally reprehensible. I do regard those who have sought to satisfy their prurience and political aims by manufacturing this slur as being moral destitutes.

Jimmy said...

What puzzles me is how someone who was a UK domiciliary at birth is treated as being as having a domicile of choice in a country in which he does not live. If what Ashcroft says is true then the law has been bent double to accommodate him.

Botogol said...

people are missing a big point about non-dom. It's not just a tax issue, being non-dom also means that the person has declared that their primary long-term allegiance is to a country other than the UK. This is not compatible with swearing an oath to the queen and being a member of the legislature.

Unsworth said...

@ Botogol

"This is not compatible with swearing an oath to the queen and being a member of the legislature."

Opinion, not fact. Who determines compatibility?

Sean Haffey said...

>Unsworth @ 3.09

In answer to your question:

Simple laws of logic.

DespairingLiberal said...

A very good question Jimmy. According to his very interesting Wikipedia entry, he started operations in Belize in 1981 and became a dual-nationality citizen of that "country" (more like his personal estate these days) some years later. So given that he was born in 1946 (if Wikipedia is accurate), he spent AT LEAST 40 YEARS of his life to start with as a sole-UK citizen.

Just what the heck has been going on at the HMRC Special Unit? The one that deals in such a nice, butlerish way with special people like Al Fayed (still obsessively pursuing revenge for his own foul-ups), Colonel Gadaffi's son (wanted for violent assualts in Switzerland but fine in London) and other similarly marvellous people. Lord A must be so glad to not have been asked too many tough questions during his prosperous life!

From the Wikipedia article:

"In his 2005 biography, he admitted that it is a country where his interests have been "exempt from certain taxes for 30 years."[7] In 2009, the Prime Minister of Belize Dean Barrow told its parliament:[8]
“ Ashcroft is an extremely powerful man. His net worth may well be equal to Belize's entire GDP. He is nobody to cross. ”

Victor, NW Kent said...

I am afraid that this declaration by Lord Ashcroft has been delayed for too long without apparent necessity.

If he pays UK tax on his UK income that is all he is legally obliged to do. There are no such animals as voluntary taxpayers - here or anywhere else. The arrangements he may have in Belize and elsewhere are not our business. Nobody attacks St. Bono, who is Irish, for having all his income declared in Holland for a lesser tax burden.

If the non-dom situation is exploited by many that is entirely of Brown's doing. I wonder where Tony Blair now pays tax - has he also become Irish like his children?

Michael Ashcroft supports a major charity to a far greater extent financially than he does the Tories. He also house his collection of Victoria Crosses for the nation at his own expense.

Unlike Lord Paul he has no stain on his character over House of Lords expenses - he doesn't claim any at all.

So, he has little to apologise for but the vicious side of Labour, blinded to any version of affairs except their own, will carry on about this until his dying day.

Paddy Briggs said...

A brief thank you to Alix for seeing the point and the simple truths in my two posts.

The puerile abuse thrown at me by Unsworth and Moriaty ("moronic", "stupid", "bollox", "class prejudice", and the rest) have been shown to be just invective - sound and fury, signifying nothing!

For ten years Michael Ashcroft has avoided answering a question that it was perfectly legitimate that he should have answered. Now he has come clean. Good. As Sean Haffey says there are questions as to whether "he is ... fully committed to the UK [or not]". I have expressed my opinion that he is less of a citizen as a result of his “non dom” status than most of us who pay UK tax on all our earnings. Not really a revolutionary point of view is it?

Unsworth said...

@ Paddy Briggs

Actually I can offer much better abuse than that.

You still seem to believe that "most of us (who) pay UK tax on all our earnings". That is patently untrue. Why do you persist with this falacy? None of us pays income tax on 'all' of our earnings, and very many people (at various points in the financial scale - from low to high) pay no tax at all. Or did you not realise this?

As to Ashcroft 'avoiding' answering a question, no one is obliged to make any answer to anyone. However you are clearly in the business of defining these rules to suit your own views. Where in statute is this principle enshrined?

But your view of Ashcroft being 'less of a citizen' is remarkable. Do you have some classifications of citizenry you'd care to publish? Is there some sort of pecking order? Do you have a definition of 'citizen' you'd like to share?

No, your view is certainly not revolutionary, it is crass.