Lib Dems face tax haven link

The Liberal Democrats, who have long championed closing tax loopholes used by offshore companies, are themselves in the spotlight for being funded by a donor linked to a company based in a tax haven.

Alpha Healthcare, a residential homes firm which gave the party £125,000, is the party's biggest donor. Alpha is run by Harberry Investments, based in the British Virgin Islands.

Harberry's accounts remain hidden due to being based in the tax haven, which does not compel businesses to publicly declare their accounts.

The Lib Dems this week reiterated their call for a clampdown on the use of offshore companies as part of a campaign to close in on tax-avoidance schemes used by Britain's most wealthy, The Times reported.

Alpha Healthcare has given the party large sums in the past, including £100,000 last year, £160,000 in 2005 and £10,000 in 2004.

The company's shareholders, Bhanu Choudrie and his brother Dhruv – also listed as shareholders in the parent Harberry – are Alpha directors.

However the two are Indian citizens, with a 'non-domicile' status, which entitles them to avoid British tax on any income or gains from their overseas assets.

Alpha Healthcare declined to comment, but a Lib Dem spokeswoman said: 'Liberal Democrats are not opposing in principle to the status of non-domiciled investors but we do believe that the current tax exemptions should be tightened up.

'Our position was developed by the Tax Commission completely independently of the view of any particular individuals.'

Further reading:

Lib Dems accused over donor link to company in offshore tax haven

Lib Dems outline taxes for the rich

Lib Dems move on non-doms