Jeremy Corbyn has been accused of hypocrisy after two Labour councils were revealed to have used offshore companies to avoid paying millions in tax.
Two local authorities controlled by the party – Sefton Council in Merseyside and Warrington Council in Cheshire – avoided paying over £12 million in taxes, an investigation has shown.
It comes after 13.4 million files – known as the Paradise Papers – relating to offshore investments around the world were leaked to the German press.
Corbyn said the Queen should apologise if £10 million of her personal fortune had been invested offshore to avoid paying tax in Britain, as the leak suggests.
Jeremy Corbyn (pictured) has been accused of hypocrisy after two Labour councils were revealed to have used offshore companies to avoid paying millions in tax
Corbyn suggested the Queen (pictured) should apologise if £10million of her personal fortune had been invested offshore to avoid paying tax in Britain, as the leak suggests
But in May, The Times has reported, Sefton Council bought the New Strand shopping centre in Bootle through a Luxembourg company for £32.5 million – saving £1.6 million in stamp duty.
In July, Warrington Council bought a business centre in Cheshire – Birchwood Park – for over £200 million, again using an offshore firm.
That saved the authority about £10.5 million in stamp duty.
In an email seen by The Times, Sefton Council’s leader wrote in relation to the shopping centre purchase: ‘It is true that one of the important considerations for purchasing the company rather than the asset is that the council would not have to pay stamp duty land tax.
‘This is a widely accepted tax-efficient way of completing the purchase.’
A levy was created to prevent residential property being kept in offshore companies by former chancellor George Osborne in 2013, but it was not applied to commercial property.
That left owners of the likes of the Cheshire business park and Bootle shopping centre free to hold their property overseas.
Liberal Democrats leader Sir Vince Cable hit out at Labour in response to the news, saying it ‘appears somewhat hypocritical’ for the party’s leadership to attack tax avoidance schemes without having ‘their own house in order’.
In July, Warrington Council bought a business centre in Cheshire – Birchwood Park (pictured) – for over £200 million, again using an offshore firm
Sefton Council bought the New Strand shopping centre in Bootle (pictured) through a Luxembourg company for £32.5 million – saving £1.6 million in stamp duty
But Sefton Council said it had not intended to avoid stamp duty using the purchasing scheme, which is not illegal.
It bought the shopping centre’s holding company, a spokesman added, because the owner was only willing to sell the holding company and not the shopping centre itself – thereby giving it no choice but to avoid the tax.
The offshore structure has now been dismantled, the spokesman said, stressing that the purchase supports ‘regeneration in Bootle’.
Warrington Council, meanwhile, said that the ‘only tax not being paid’ was the ‘one-off’ stamp duty, adding: ‘To complete the acquisition in a timely manner the council agreed to leave the business offshore as trying to complete the deal and bring it onshore would have delayed the purchase.’
The Birchwood Park business centre is still held in an offshore company.
Labour told The Times it is committed to ‘tackling tax avoidance’.