Labour hypocrisy in VAT 'move'
Flying in the face of its pre-Budget report sentiments, the Labour Party avoided almost £1m in VAT when it bought its new headquarters in Old Queen Street.
According to Property Week, Labour treated the purchase as an acquisition of a business rather than a property purchase, through the mechanism of ‘Transfer of a Going Concern’.
The mechanism allows companies to buy other businesses rather than properties to avoid adding VAT to the price.
But tax experts said the move was ‘completely contradictory’ to the avoidance clampdown measures outlined in last month’s PBR.
John Davison, head of indirect tax at Baker Tilley, told Property Week: ‘It is ironic that a fortnight after Gordon Brown announced his attack on unscrupulous tax avoiders the Labour Party seems to be doing exactly the same, and undermining Customs and Excise’s efforts to stamp out tax avoidance.’