Len McCluskey’s VAT woes have been exposed, and with HMRC waving large bills around he has been reduced to parroting Vodafone-style excuses about historic arrangements and deals struck with the taxman. It was only a matter of time before someone asked the question of whether Ed Miliband should accept Unite’s money.
Just like Len, the Labour leader has had plenty to say on the topic of tax avoidance. Here he is in The Guardian:
“It is part of a culture of irresponsibility. If everyone approaches their tax affairs as some of these companies have approached their tax affairs we wouldn’t have a health service, we wouldn’t have an education system.”
As he famously said, in his view the world can be divided into producers, who do what Labour think is the right thing, and predators, who act immorally for “the fast buck”.
It’s hard to see how Unite hasn’t placed itself in the predator category given that, according to The Times, the union has been overestimating the amount it spends on VAT-free activities and underestimating the amount it spends on VATable work like political campaigning.
Accordingly, Priti Patel MP has written to Ed Miliband urging him to refuse to take Unite donations until the union has paid what it owes to the taxman.
Here is her letter in full:
The Rt. Hon Ed Miliband MP
Leader of the Opposition
House of Commons
14 October 2013
I am writing to make you aware of a serious case of tax avoidance, which may have so far escaped your attention.
The Times reports that the trade union Unite, who have donated over £9 million to the Labour Party under your leadership, have been investigated by HM Revenue and Customs for calculating their VAT in a ‘grossly unfair and unreasonable’ way.
As a result HMRC has calculated that Unite have avoided £2.3 million in tax, and presented them with a bill. This appears to be a clear case of a large organisation deliberately reducing the tax bill that it rightfully owes through the use of aggressive tax avoidance techniques.
I would also remind you that in the light of the John Mills donation, and the case of Labour Party Properties Ltd., this is an area in which the Labour Party still has serious questions to answer.
In the past you have described tax avoidance as ‘a terrible thing’. I agree. I also agree with your statement that if everyone approached their tax affairs in this way then ‘we wouldn’t have a health service, we wouldn’t have an education system’.
To put Unite’s unpaid tax bill into perspective, £2.3 million could pay for 72 teachers or 33 doctors.
With this in mind, I believe that it would be only right for you to refuse to accept any further money from the Unite union until they have paid the Exchequer the outstanding tax that they owe.
Priti Patel, MP for Witham