Senior UK cabinet ministers have reportedly expressed concerns after prominent leave campaigners who donated large sums to the Brexit campaigns during the 2016 referendum recently received tax demands from HMRC.
The demands from HMRC hinge on inheritance tax rules that require tax to be paid upfront on large gifts. Party political donations, as well as donations to charities, are usually exempt, but HMRC has said that does not apply to individuals who donated to the referendum campaign.
Eurosceptics have argued they will bear more of a tax burden for donations to the leave campaign than remain supporters, because the large donations were more likely to come from wealthy individuals or businessmen, not listed companies.
HMRC dismissed the suggestion that the tax demands were evidence of bias, saying it applied the law equally across all donors. Others derided the complaints as pleas for “bungs” for wealthy donors.
Those reported by the Telegraph to have received payment demands in the last fortnight include the banker and former Conservative party co-chair Peter Cruddas, worth a reported £750m, who gave £900,000 to Vote Leave.
The former Ukip donor Arron Banks, who donated £8.1m to his Leave.EU campaign group, told the Telegraph the £2m bill he had received in the past month was the “revenge of the establishment”.
Another who has received a payment demand is Robert Edmiston, a millionaire motor trader worth a reported £440m, who donated £850,000 to Vote Leave and £150,000 to the Grassroots Out campaign through his company IM Group. Lord Edmiston told the Times he had been sent a bill from HMRC for £200,000.
It is understood one remain campaign donor has also received a similar substantial tax bill.
The Sunday Telegraph reported concerns from both Boris Johnson and Michael Gove about the payment demands, quoting a friend of the environment secretary as saying: “Michael is obviously concerned about action that appears to impinge on our democratic values. This will appear to many like an attempt to silence anyone who dare challenge the establishment and status quo.”
A HMRC spokesman said: “Donations to campaign groups don’t qualify as exempt gifts to political parties, unless the recipient is a political party meeting the criteria set out in section 24 of the Inheritance Tax Act 1984.
“No special exemption was granted ahead of the 2016 referendum. Obviously, the legislation is applied equally to all organisations and groups.”
The Conservative MP Jacob Rees-Mogg told the Telegraph it showed the government was “penalising people who had the audacity to challenge it”.
Other MPs said it was clear the tax should be paid if it was owed. The prominent Conservative MP Nicholas Soames said: “Surely it should be quite clear on so-called ‘Brexit tax’ demands – if the tax is owed under statute then it should be paid.”
Jolyon Maugham QC, a tax expert and pro-remain campaigner who has set up the Good Law Project to challenge both tax evasion and Brexit matters, wrote in an article for his blog on Sunday that HMRC was “doing no more than acting as parliament and the law compel it to”.
He wrote: “Rees-Mogg, Johnson and Gove are suggesting that the law should be disapplied to give these immensely wealthy men huge bungs. That’s what the leaders of Brexit are saying. That you should fund unlawful bungs of money to immensely wealthy Brexiters. That’s how much they care about normal working people.”
Separately, it was revealed on Sunday that the former Ukip leader Nigel Farage has told newspapers he will not receive an award in this year’s New Year honours list.
The lack of a peerage or knighthood has been a sore point for the MEP for several years. He has previously claimed a feud with the former Ukip MP Douglas Carswell blocked him from receiving one.
Farage, now a talk radio host, told the Telegraph: “Of course I have not got an honour of any kind – I am not a remainer. Every one of them got CBEs, they got knighthoods, quite extraordinary. I have got a Brexmas present far more important than the honour. A campaign to get back British blue passports has been successful.”
This article was written by Jessica Elgot, for theguardian.com on Sunday 24th December 2017 14.10 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010