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Monday, December 21, 2009

A taxing problem

This morning's Guardian reveals the mildly amusing news that the Taxpayers' Alliance, which claims to represent the interests of ordinary taxpayers is using a charitable arm which gives it access to tax relief on donations from wealthy backers:

The Conservative-linked Taxpayers' Alliance, which campaigns against the misuse of public funds, has set up a charity under a different name which can secure subsidies from the taxman worth up to 40% on individuals' donations. In one example, Midlands businessmen said they channelled funds through the Politics and Economics Research Trust at the request of the Taxpayers' Alliance after they asked the campaign group to undertake research into policies which stood to damage their business interests. The arrangement allowed the Taxpayers' Alliance to benefit from Gift Aid on the donations, a spokesman for the donors said.

Over on Liberal Democrat Voice, Stephen Tall chips in to defend the Taxpayers' Alliance. He makes some valid points including that this arrangement is not unusual and is utilised by a number of think tanks such as the Centre for Um. He also makes the very sensible point that donors to political organisations should be able to receive taxable benefits equivalent to those gained by donating to charity:

And it’s not just me who says this: in 1998, the Committee on Standards in Public Life, under the chairmanship of Lord Neill of Bladen, made exactly this recommendation, though it was rejected by Labour, the Government arguing that, ‘A tax-relief scheme would be expensive for the Inland Revenue [losing tax revenue of up to £5m a year] and political parties to administer relative to the likely level of take-up.’

State funding of political parties was never likely to find popular favour: the row over MPs’ expenses has put paid to it for at least a generation. But the democratic party political system – policy development and campaigning – has to be paid for somehow. I believe government has a role to play in encouraging more citizens to get involved in our democracy, and that includes encouraging all of us to help pay for the party political work which underpins it. Better, in my view, that citizens be able voluntarily to show their financial support for political causes, than for it to be made compulsory through state funding.

Stephen Tall's point is worth making and yes, the Guardian is being tribal, but the fact is that this story is worth noting purely for the irony involved. With one of their director's, Alexander Heath living in a farmhouse in the Loire without having paid British tax for many years as well, it is difficult to take this organisation seriously, if indeed we ever did.
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