Jeremy Corbyn releases return to show tax transparency
Jeremy Corbyn used the end of tax return season as an opportunity to put tax transparency back on the political agenda.
Yet even the leader of the opposition can’t escape being put on the wrong tax code. When Corbyn published his tax return this week, the documents revealed a one-off £6,442 tax payment. A source said the Labour leader paid the amount due to “administrative error” after he was assigned the wrong tax code.
For the fourth time since becoming Labour leader, Corbyn published his tax return, urging other politicians to “lead from example” and publish theirs. “I believe that if we aim to reform our tax system to be more transparent, then politicians must lead by example,” he said.
“In government, Labour will crack down on the scourge of tax avoidance and evasion and will put full transparency at the heart of our programme.”
The Islington MP’s paper return showed he paid £27,870 in tax on his MP earnings of £79,807 and a further £10,787 in tax on his £43,717 earnings as leader of the opposition.
Elsewhere, Corbyn collected £6,648 in state pension and a Unison pension of £2,438.07 that incurred £975.20 tax. He also listed a £1,075 Gift Aid payment
Three years ago, he submitted his return five days late and suffered a £100 penalty. He learned his lesson this year and filed the return in good time on 22 January.
Shadow chancellor John McDonnell followed suit and released his tax return on 11 February. Like Corbyn, McDonnell didn’t use any supplementary pages to include trusts, capital gains, foreign income or income from UK property.
While neither Theresa May or Chancellor Philip Hammond have taken Corbyn and McDonnell up on their challenge and released their tax returns, back in April 2016 politicians rushed to get their tax returns into print.
Politicians from all parties tossed their tax returns around like confetti to one-up each other on transparency in the wake of the Panama Papers revelations. Then-prime minister David Cameron was the first to release his ‘tax summary’ in an effort to ward off criticisms of his father’s Blairmore Holdings offshore company.
However, Cameron also admitted that he had other capital gains. At the time, tax lecturer Giles Mooney scoffed: “Publishing UK tax return to show you’ve not hidden anything is like me showing you a picture of salad to prove I’ve given up cake.”
When shadow chancellor John McDonnell released his tax return in 2016 following the Google tax settlement, eagle-eyed AccountingWEB readers spotted a discrepancy – the shadow chancellor had not disclosed the member of parliament form required from MPs. Some readers were sympathetic towards this “elementary error”, while others pointed to the likely explanation that HMRC does not yet allow online filing of MP pages.
Corbyn’s challenge for other politicians to prove their tax transparency mirrors the more public Scandinavian model, where Norwegian citizens’ annual tax returns are posted online. The transparency means workers can see how much their colleagues earn, or how much their local politician paid in income tax.