10 February 2010

Cameron and Michael Ashcroft’s tax status

The theory goes that Our Dave was going to have an easy ride along the journey to Downing Street via Buckingham Place.  However, he has hit some heavy weather recently and yesterday a storm blew up over ‘Old Tory’ and ‘New Tory’.  Then we had a poster with a touch of inaccuracy about it.  Small matters that consume much quality time.

The sensitive issue of Michael Ashcroft and his tax status has been bubbling away for sometime, with nobody the wiser if he has helped reduce our deficit.  Now along comes Alastair Campbell, who yesterday was twittering away on on the very subject.  Clearly, the Labour party wish to bring this matter to the boil in the hope of causing Cameron further strife.

It’s a complex subject for us non-accountants to grapple with, who are more interested in the big picture items that dominate our national life.  Andrew Neil, having interviewed Sir George Young, provides us with a useful easy-to-understand guide:

His tax status is non-dom, as I've always suspected. He's not a tax exile, which would subject him to the 90-day rule -- and he seems to spend a lot more than 90 days on these shores. He's probably non-domiciled for tax purposes in the UK, which means he pays tax on any income generated in Britain but not on his world-wide income, a status those of us who pay our full whack of tax might not like or even resent -- but a status which is perfectly legal, been in existence for many years and which Labour has not touched (despite promising to do so in its 1997 manifesto).

Neil concludes:

Of course there is a widespread view that if you sit in the Lords and Commons then you should pay full British tax, like the people you rule over -- and that, indeed, is about to become the law.

Then along comes this article, which muddies the water further:

A senior source said Sir George Young had "mis-spoken" when he told the BBC that Ashcroft was a "non-dom" – ­allowing him to avoid paying British tax on ­overseas income and assets.

Asked to clarify Ashcroft's tax status, the spokesman referred to remarks by Cameron last December in which he said: "Lord Ashcroft's tax status is a matter between him and the Inland Revenue."

But earlier this week, Cameron said it was no longer acceptable for ­parliamentarians to regard their tax affairs as a ­private matter between ­themselves and the tax authorities. "For years all parties have taken the same view that someone's tax status is a matter between them and the Inland Revenue. That needs to change," he said. Cameron cited the Tories' support for a change in the law to ensure that all ­parliamentarians are treated as full British taxpayers.

So, the confusion continues and provides Campbell & Co with a neat little divisionary tactic to move the debate away form more weightier issues.

Does all this matter?  It does, because it’s yet another example of Cameron’s lack of a strategy.  He is having to put the battle bus in reactive mode on a daily basis.

‘New Tory’, ‘Old Tory’; poster silliness and Lord Ashcroft.  Little issues that expose a wider problem that Simon Jenkins puts his finger on:

The most successful leader is an opportunist, snatching at whatever can be turned to advantage. Above all, he must not lose control and leave his followers ­uncertain of their destination. He must have a clear message. It is that message that ­Cameron lacks at present, with a coherence that only the leader can supply.

The consolation for Cameron is that Gordon Brown is still in post, who has his own little local difficulty today over his latest back-of-the-envelope proposal.

After four years of preparation, Cameron should be in auto-pilot mode as we near the election, just as Thatcher was in 1979 and Blair in 1997.

Our Dave’s path to power is going to be a very bumpy ride.

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