Tycoons who bankrolled Brexit have accused the taxman of using obscure inheritance laws to demand bills of up to £2million.
Billionaire Midlands entrepreneur Lord Edmiston, banker Peter Cruddas and former UKIP donor Arron Banks have all received tax demands from HM Revenue and Customs in the last fortnight.
All three were prominent backers of the Leave campaign and in what has been labelled the ‘revenge of the Establishment’, HMRC has cited an obscure area of inheritance tax laws which requires people to pay tax upfront of large ‘gifts’.
Former UKIP donor Arron Banks (left) and City entrepreneur Peter Cruddas (right) backed the Leave campaign and have now been slapped with mammoth tax bills
Foreign Secretary Boris Johnson fronted one of the Leave campaigns which received money from the tycoons. HMRC’s demands have been labelled the ‘revenge of the Establishment’
Usually, donations made to charities and political parties are exempt but now the taxman has said payments from individuals to referendum campaigns are taxable, reports the Daily Telegraph.
The banks which funded the Remain campaign, including Goldman Sachs and JP Morgan, will likely escape any action because they cannot be made liable for inheritance tax, though at least one Remain donor has also been slapped with a tax demand.
It is said the taxman’s demands will hit Leave donors harder than Remain because the campaign to exit the European Union was mainly funded by individuals rather than the publicly listed companies who mostly backed Remain.
The Foreign Secretary, Boris Johnson, fronted one of the campaigns which received money from the donors.
The three Brexit-backing businessmen allegedly targeted by HMRC have said the taxman is acting undemocratically and the Chancellor, Philip Hammond, could come under pressure to intervene.
Billionaire Lord Edmiston donated a total of £1million to Leave campaigns and has been slapped with a £200,000 tax bill
Mr Hammond was a prominent Remain backer.
Lord Edmiston, who made his fortune in the motor trade, donated £850,000 to the official Vote Leave campaign as well as a further £150,000 to an unofficial leave campaign.
He has been slapped with a tax bill of £200,000.
Mr Cruddas, a wealthy City entrepreneur, gave £900,000 to a leave campaign and has been asked to pay HMRC £180,000.
He said he would challenge the bill and labelled it ‘outrageous’.
And Mr Banks, the former UKIP donor, is being asked to pay £2million in inheritance tax on a £8.1million donation to the unofficial Leave.EU campaign.
He told the Telegraph the bill was the ‘revenge of the Establishment’.
Experts say HMRC has decided donors must be taxed because they have reduced the value of their estate when they die by giving away large sums of cash.
Rules state that an individual can give away £325,000 in their lifetime before being taxed.
Anything above that will be taxed.
An HMRC spokesman rejected the claims.
A spokesman told MailOnline: ‘This suggestion is incorrect.
‘Donations to campaign groups don’t qualify as exempt gifts to political parties, unless the recipient is a political party meeting the criteria set out in section 24 of the Inheritance Tax Act 1984.
‘No special exemption was granted ahead of the 2016 referendum.
‘Obviously, the legislation is applied equally to all organisations and groups.’