Labour lenders had tax affairs probed

An independent vetting panel for the House of Lords probed the tax status of
Dr Chai Patel and Sir David Garrard as peers when vetting their suitability for
the Upper House.

Official documents seen by the
Sunday
Times showed that the Lords appointment commission
had objected to the nominations of Patel and Garrard, who had both made
significant loans to the Labour Party, despite the insistence of prime minister
Tony Blair that they be made peers.

In its background checks on the candidates, the commission found that
Garrard, who bought a controlling stake in Allders before
it collapsed, had been a ‘non-resident’ in the past for tax reasons.

The commission also found that Patel had non-domiciled tax status, so he was
only obliged to pay tax on UK earnings.

In minutes obtained under a freedom of information request,
Lord
Stevenson , who chaired the vetting meeting in November 2005, said
the process should consider ‘the effect the appointment would have on the House
of Lords and the honours system more generally’.

The tax issues raised with regards to Patel and Garrard follow revelations
that the Labour Party was operating a secret loans scheme.

Further reading:

Non-doms £1bn dodge

Labour accused of not disclosing loans

Lord Levy’s accountancy training ‘key to enquiry’