Hammond looks at ‘referendum tax’
PRIVATE donations to referendums might not be taxed in future, after an outcry over “anti-democratic” tax demands running into millions of pounds that were sent to Brexit donors.
Philip Hammond, the Chancellor, is said to be “sympathetic to looking carefully” at changing the tax law.
Last night, donors facing the large bills welcomed the change of heart – but urged Mr Hammond to reform the law retrospectively.
The tax authorities had seized upon a relatively obscure area of inheritance tax law which forces people to pay the 20 per cent levy in advance on large “gifts” during their lifetimes. In parlia- ment yesterday, Jacob Rees-mogg called it “deeply unfair” for people who contributed to referendums linked to changing the voting system in Scotland or leaving the EU to receive such bills.
Mel Stride, the Financial Secretary to the Treasury, said any reforms would be considered for future referendums, but the Treasury’s position was not to apply tax changes retrospectively.
Peter Cruddas, a City financier who faces a demand of £200,000 on his £900,000 donation, said the admission was an “acknowledgement” that the Government thinks the law was not intended to tax donations by “publicly spirited people”.
“Clearly it [the current law] is either right or it’s wrong, and if it is wrong it should be back-dated,” he said.