Starmer ‘exempt’ from paying £48k tax on freebies

Prime Minister under fire for accepting £107k of gifts – more than any other MP since 2019

Sir Keir Starmer should pay tax on the £107,000 of freebies he received as Labour leader, accountants have said.
The Prime Minister is under fire for accepting more gifts than any other MP since 2019 – including football tickets, clothes and accommodation. 
However, HM Revenue & Customs (HMRC) “appears to exempt” politicians from paying tax on gifts from donors and political allies despite requiring taxpayers in other sectors to do so, according to accountancy firm Blick Rothenberg.
Robert Salter, a director at the company, called for all MPs to be taxed on gifts in the same way as thousands of other workers – meaning Sir Keir would face a tax bill of close to £50,000.
He said: “HMRC argues that the gifts given to media personalities or social influencers, which appear to be very similar in many cases to the gifts received by politicians, are liable to income tax and in some cases also National Insurance Contributions.”
But he pointed out that HMRC has “never argued” that these “complex rules” should apply to politicians, who “appear to have been able to receive gifts from donors and political allies on a tax-free basis”.
There is no rule that allows politicians to avoid paying tax on gifts, Mr Salter said. Instead, the “current situation is more a result of practice rather than explicit exemption”. 
Neither donors or recipients are breaking any laws if political gifts are not declared as taxable income, he added.
Blick Rothenberg calculated that Sir Keir’s tax bill on the gifts would be as high as £48,150.
The figure assumes that all of the Prime Minister’s gifts since 2019 are taxable, and that his income exceeded the additional rate income tax threshold of £125,140 in each of the last five tax years.
Labour’s “cronyism” row has centred on donations and gifts from Lord Alli, who was previously given a pass to No 10 despite having no official government role.
The Labour peer, worth £200m, has given Sir Keir tens of thousands of pounds to spend on suits and glasses. Lady Starmer was given £5,000 worth of clothes and personal shopping.
In February, Sir Keir published a summary of his tax bill for the 2022-23 tax year. It showed he had paid a total of £99,431 in tax, including £44,308 in income tax and £52,688 in capital gains tax.
Mr Salter said there was “no evidence” of the Prime Minister having paid any tax on gifts. 
He added: “If tax was paid, it’s much more likely that Lord Alli, or whoever the donor was, would have paid it, rather than Sir Keir himself.”
The Telegraph revealed last week that the Prime Minister repeatedly used a luxury £18m penthouse owned by Lord Alli during the general election campaign.
When calculating a tax bill, HMRC distinguishes between items given in exchange for promotion or advertising – so-called “barter transactions” – and goodwill gestures with no strings attached.
One tax adviser from a leading accountancy firm told The Telegraph that a gift is considered non-taxable if it is made for “personal reasons”, such as a wedding present or as a “mark of personal esteem or appreciation”.
They added: “It may have been argued in the past that gifts to politicians are made as a mark of personal esteem or appreciation. 
“But that argument would be much stronger for long-serving politicians who had a long record as a public servant, where their contribution to the public good transcends their day-to-day role as an MP. 
“In other cases, it may be more difficult to link a gift to anything other than their employment.”
Last year, the tax office sent “nudge letters” to thousands of online traders, gamers, and social media influencers that it suspected had not paid enough income tax on their online earnings. 
Some influencers who receive payment in the form of clothes, holidays or beauty products for promoting a brand might not realise they may need to pay tax on these goods and services. 
Scott Guthrie, of the Influencer Marketing Trade Body, urged HMRC to treat all taxpayers equally.
He said: “I think it’s only fair that as the content creator economy gains momentum, they pay their way. But it’s got to be commensurate with workers in other professions, including politicians. 
“Influencers often get the raw end of the deal when it comes to tax. It feels like regulators are getting the better of them when they’re not scrutinising other sectors as closely.”
An HMRC spokesman said: “We’re committed to ensuring everyone pays the right tax under the law, regardless of wealth or status.”
The Prime Minister has previously defended accepting gifts, saying that “all Members of Parliament get gifts” and “the important thing is that they’re declared in accordance with the rules”.
Last week, No 10 sources confirmed that Sir Keir, Angela Rayner and Rachel Reeves will no longer accept free clothing.