Hodge accused of receiving £1.5m in shares from tax haven
Former chair of public accounts committee and fierce critic of tax avoidance allegedly benefited from Liechtenstein Disclosure Facility
THE head of parliament’s public accounts committee (PAC) has been accused of hypocrisy after it was claimed she received more than £1.5m in shares from the tax haven of Liechtenstein.
Margaret Hodge, the Labour politician who has built a reputation as a fierce critic of tax avoidance and “secretive” offshore funds as head of the public accounts committee, received the funds through a controversial scheme that allows Britons to obtain a generous settlement with HMRC on any undisclosed tax liabilities held in offshore bank accounts, The Times reported.
The revelations are an embarrassment for Hodge, Labour’s candidate for Barking and Dagenham in east London, and have left her open to charges of hypocrisy by her opponents. As chair of the PAC, Hodge has repeatedly attacked big business over the use of offshore tax arrangements and in February accused Big Four accountants PwC of promoting corporate tax avoidance on an “industrial scale”.
According to the paper, Hodge was among the beneficiaries in 2011 of the winding up of a Liechtenstein trust that held shares in Stemcor, the private steel-trading business set up by her father. Hodge said she had “no role” in setting up or running the company and was not a beneficiary of the foundation until 2011, when the shares were brought onshore.
Around 96,000 Stemcor shares handed to Hodge in 2011 came from the tiny principality, which is renowned for low tax rates. Evidence uncovered by The Times shows that three quarters of the shares in the family’s Liechtenstein trust had previously been held in Panama, which Hodge described last month as “one of the most secretive jurisdictions” with “the least protection anywhere in the world against money laundering”.
The shares were transferred onshore using the Liechtenstein Disclosure Facility (LDF), a tax deal signed between Britain and the principality to allow wealthy individuals to move billions of pounds back to Britain in return for paying the tax owed and a penalty. Originally due to end to end in March 2015, strong demand for the scheme saw it extended until 5 April 2016.
Hodge has always declared her holding of Stemcor shares in the parliamentary register of financial interests. She said she had received assurances that the company always paid the “appropriate tax” and had ensured that “any shares I held were above board and that I paid all relevant taxes in full. Every time I received any benefit from the company this happened”.