The corporate tax avoidance scandal keeps growing, and now it really has reached 10 Downing Street
Theresa May has faced criticism from many angles during her time in office. Now her husband Philip is proving to be a source of embarrassment, as the tax affairs of a company he works for have come under increased scrutiny.
Broken promises
May came into power promising ‘a country that works for everyone’ at the Conservative Party conference of 2016. She even spoke of inequality and said she would build, “an economy that’s fair and where everyone plays by the same rules.” She said all firms should pay “their fair share of tax” and added:
Whoever you are you – however rich or powerful – you have a duty to pay your tax.
Those words returned to haunt her when the ‘Paradise Papers‘ were leaked in November 2017. The documents alleged that her husband’s company, Capital International Limited, used offshore loopholes to invest in tax havens. Although not illegal, this seems like exactly the kind of behaviour his wife had pledged to stop.
Tax avoidance?
According to the 26 November edition of The Daily Mirror, Mr May’s firm recorded losses of £125m since 2009, making it officially exempt from payment of corporation tax. Despite that, it turned over £467m during the same eight year period and its board of directors received £43m in wages and bonuses. In response, The Mirror quoted Professor Prem Sikka from the University of Sheffield who points out the contradiction:
It’s very odd a business can pay substantial amounts to directors while not turning a profit.
Growing concern
Capital International Limited has responded by saying it intends to resume paying corporation tax in 2018. It has also distanced Mr May from the controversy:
Read on...
Philip is not involved with our investment research or portfolio management activities.
Yet with the company now named twice in recent weeks, concern continues to grow over Philip May’s involvement. If the Prime Minister is serious about tackling corporate excesses, her husband’s continued role with Capital International Limited needs careful examination.
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