Ed Miliband stood accused of hypocrisy today after Labour helped a donor avoid thousands of pounds in tax on a major gift to the party.
Millionaire John Mills gave £1.65 million to the party in shares rather than cash which meant Labour kept more of the donation, instead of about half going to the Inland Revenue.
The news threatened to overshadow Mr Miliband’s welfare speech today and is particularly embarrassing as he has heavily criticised the tax arrangements of some firms.
Last month he told Google it was wrong that it had gone to “extraordinary lengths” to avoid tax.
Tory MP Stephen Barclay sits on the Public Accounts Committee which has savaged executives of major companies like Google, Amazon and Starbucks over tax avoidance.
He said: “The party Mr Mills supports says individuals should pay half their income to the government, there’s the hypocrisy.”
But Labour refuted any suggestion the arrangement constituted tax avoidance or that it compared to the activities of major corporations.
A source said share donations were common and made so a party had a steady stream of income from dividends which were still taxable. The source said: “The donation was declared in full with the Electoral Commission.”
