‘HYPOCRITE’ SNP MP’S £18K TAX DODGE
He admits using loophole to cut his bill... But now he wants similar schemes banned
A NATIONALIST MP has admitted benefiting from a controversial tax avoidance scheme in the latest damaging blow to hit the party.
Phil Boswell, who was elected in May, has campaigned publicly to close loopholes that can allow high earners to minimise their tax bills.
But last night he was accused of hypocrisy after acknowledging he had taken advantage of a complicated scheme to reduce the amount of tax he paid. It is the latest blow to hit the SNP’s new crop of MPs, with two others already having been suspended by the party.
The Scottish Mail on Sunday has learned that Mr Boswell received an £18,000 interest-free loan from a company closely associated with a
previous tax avoidance scandal. The loan was made to him as a result of his job as contract manager.
Yesterday, he confirmed that the arrangement allowed him to avoid paying tax, and insisted that it was ‘common practice’.
HMRC is being urged to launch an investigation into what critics called a ‘hugely serious’ matter.
MPs Michelle Thomson and Natalie McGarry have both been suspended from the party following separate allegations.
Last night, Lib Dem peer Lord Purvis of Tweed, said: ‘This is a shocking and very serious revelation. Parliamentary rules seem to have been breached in not declaring personal gain when raising, hypocritically, tax evasion schemes in parliament.
‘It’s shocking that wealthy people who have broad shoulders should think it’s acceptable to use such dodgy tax avoiding tactics. The previous Coalition did much to clamp down on this kind of practice and it needs to be investigated urgently.’
Mr Boswell became active in politics relatively recently and was one of the 56 Nationalist MPs elected in May’s General Election.
His own register of interests discloses that he has benefited from ‘an interest-free loan of £18,308.82, made by Hyrax Resourcing and now repayable on demand’, and states that payments from Hyrax relate to his time working as a contracts manager for US energy company Phillips 66, through support services firm PDI Ltd.
According to company records Hyrax has links, including shared directors, with another company, Peak Performance Professional Contracts, which helped thousands of wealthy individuals, notably comedian Jimmy Carr, to cut their tax bills by creating off- shore loans for UK high earners. Although legal, George Osborne has branded schemes designed to cut tax bills through interest-free loans ‘morally repugnant’.
A report by the House of Commons public accounts committee earlier this year called for legislation to outlaw aggressive tax avoidance.
Mr Boswell, who has worked for oil giants including BP, Rio Tinto, Shell and Premier Oil before becoming an MP, has tabled Commons questions calling on the Chancellor to close ‘tax avoidance schemes exploited by private equity and hedge fund managers’. In a newspaper interview, he said: ‘Tax avoidance costs the economy nearly four times as much as benefit fraud, yet this Government blames the most vulnerable in society for the economic problems caused by a lack of regulation and enforcement in the financial industry.’
As a party, the SNP tabled an amendment in the Commons in October criticising the UK Government for having ‘failed to close the tax loopholes that are allowing multimillionaires to pay less tax on their earnings than hardworking families on middle and low incomes, such as teachers and nurses.’
Hyrax is based in Mid Glamorgan, Wales. The directors who run it, Joanna McNamara and Richard Hopkins, are also on the board of Scots businessman David Gill’s firm Peak Performance Professional Contracts.
Hyrax is listed as a ‘related party’ in Peak Performance’s most recent annual accounts.
Mr Gill’s firm ran the K2 scheme, which helped wealthy people avoid paying higher rates of tax by funnelling assets through a Jerseybased intermediary.
Participants would then receive an interest-free loan repayable on demand.
Yesterday, Mr Boswell said: ‘As clearly disclosed in my register of interests, under the conditions of my contract, and entirely at the discretion of my employer, I was entitled to this discretionary interest-free loan.’
Asked if he had knowingly or unknowingly taken part in a tax avoidance scheme, he said: ‘I am aware of mechanisms within my previous employment contract (which) utilised the existing tax legislation. This payment agreement is common practice in my previous industry.’
He added: ‘After finding myself previously employed in such a contract, I decided to utilise my knowledge and experience in my new role as an MP to highlight treasury management issues.’
Eben Wilson, of the Taxpayer-Scotland pressure group, said: ‘Constructed tax avoidance always becomes tempting to the few who will play games with the tax rules. It costs everybody.’
An HMRC spokesman said: ‘We don’t comment on identifiable taxpayers.’ Hyrax did not return calls requesting comment.
‘A shocking and very serious revelation’