18th June 2013
I’m reminded that it’s four years ago this week since I resigned from the government. At the time I said I had done nothing wrong, and technically that was – and remains – the case. My actions were lawful and did not fall foul of HMRC regulations. I did not “avoid tax” in the technical definition of tax avoidance. There was no legal case to answer. Other ministers had arranged their capital gains tax similarly and not resigned. I am sure that many members of the public who genuinely live in two places, as I did, have also done the same, for the simple reason that it is explicitly permitted by HMRC guidance. That is why my accountant had organised it for me, and the honest truth is that I hadn’t given it a second thought.
However there was still something not quite right. Public servants should always be at pains to ensure they are not only compliant with the letter of the law but also with the spirit of it, and by blithely taking the technical tax advice I was offered, I did not focus on that. It didn’t sit comfortably with my role as a Treasury minister that I took deliberate action to reduce a tax bill. As a politician, I should have been acutely conscious of that fact, but sadly I was not. So when the Daily Telegraph purchased my stolen HR records which alluded to what I had done (because the file contained an invoice to me from my accountant that I had used to claim for an entirely unrelated and uncontroversial item, and that invoice also referred to this as well) I can see why they published the story, given I was in public life at the time.
I deeply regret my actions. Not only because they didn’t sit right with my public role, but also because of the pain and anxiety brought upon those I love, and my wider circle of family, friends and constituents who felt conflicted – indeed angered – by the negative tone of the media story and by what I had done.
The Daily Telegraph suggested I had “avoided” £17,000 in tax. This number was made up and they know that. In fact, I saved £3,420. On reflection it seems ridiculous that I should in any way profit from something that I regret so deeply, so I have this year made a voluntary contribution to the Inland Revenue of the same amount. I can’t turn the clock back to correct my mistake, but I can at least make sure that I did not gain financially from it.