Make referendum campaign donations tax-free, urge MPS

MPS from the three main parties are backing a law change to make donations to referendum campaigns tax-free after outrage over HM Revenue and Customs demands to major Brexit donors.

An amendment to the Finance Bill would extend the current exemption from inheritance tax for gifts to political parties to gifts to referendum campaigns.

The change would stop millions of pounds in tax bills being levied on private donors to campaigns at the 2016 European Union referendum, the 2014 Scottish independence referendum and the 2011 AV referendum.

HMRC’S decision to send out tax letters last month means that JK Rowling, who donated £1million to Better Together during the Scottish independence referendum, could face a 20 per cent inheritance tax bill.

The change to the Bill, which is currently going through the House of Commons, is backed by more than a dozen MPS from the Tories, Labour and the Liberal Democrats, including Jacob Rees-mogg, Alistair Carmichael and Virendra Sharma, as an illustration of cross-party concern.

Charlie Elphicke, the independent Dover MP who tabled the new clause, said: “The law makes it clear that donors to political parties won’t get a tax bill. The same needs to go for people backing referendum campaigns.

“It’s crazy that people like JK Rowling should be punished for supporting democracy and caring deeply about the future of Britain.”