Ex-minister denies family firm used for tax avoidance
Adam Ingram fails to declare family firm but insists he will pay his fair share of tax when he takes money out of the company
A Labour former defence minister, who earns more than £115,000 from outside
business interests, has failed to declare a family firm that could be used to
avoid tax, the Sunday Times reported.
Adam Ingram, 62, the MP for East Kilbride, Strathaven and Lesmahagow, set up
the company with his wife, Maureen, last May as a vehicle for his consultancies
and directorships, the newspaper said.
Under Commons rules he should have declared his interest in Adam Ingram
Advisory Ltd to the parliamentary standards commissioner. The paper quoted
Ingram as saying that his failure to declare an interest was ‘a misunderstanding
on my part, which I am now immediately rectifying’.
Hours later, by coincidence, the MP told his local Labour party that he would
leave the Commons at the next general election.
Payments for consultancy services made to a company such as Ingram’s do not
incur the normal 40% higher rate income tax nor are National Insurance
contributions payable, the Sunday Times said. Instead, company income
is subject only to corporation tax at 21% for small firms.
Many people use corporate vehicles as a way of reducing their tax bill by
retaining profits within the corporation while they are still high earners. They
pay themselves dividends at a point in the future when they have fallen into a
lower income tax band.
Ingram told the Sunday Times that his company was not set up for the
purpose of avoiding tax. He is the sole director and shareholder of Adam Ingram
Advisory Ltd, while his wife is the company secretary. Ingram said he had not
paid his wife any money and he would pay the full rate of income tax when he
took any cash out of the company.
‘This is not any attempt at tax avoidance whatsoever,’ Ingrma told the
Sunday Times. ‘I am one of those people who is more than prepared to
pay my taxes and all income will be properly declared and properly taxed.
‘Nothing has come through that company that has not been individually
registered in the register of interests.’
Read the full story:
Ex-minister
fails to declare family firm