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Peter Mandelson caught red handed in tax avoidance scheme?

Major Labour politician and former first secretary Peter Mandelsen has been implicated in what could end up being a major tax avoidance scheme.

So I’m no big fan of the Tories, but suddenly they don’t seem so terrible, not after it’s been made known that Peter Mandelsen has been letting the side down by being one of the first major, high-profile Labour politicians to be flagged in what could end up being a serious tax avoidance scheme.

Mandelson apparently received around £400,000 in 2014 from a firm he owns himself. The move could easily see his tax burden eased as a result, according to new Companies house figures. This firm, of which Mandelson is the one and only shareholder, provided the former first secretary the cash during the 2013/2014 tax year and could have easily been motivated by a desire to avoid having to pay his fair share to HM Revenue & Customs according to some serious accounting boffins.

Now let’s get one thing out of the way: technically Mandelson hasn’t broken any laws, as this process is apparently completely and utterly legal. Transactions of this type aren’t subject to tax, unlike dividends and salary payments, provided the firm charges at least a modicum of interest. Essentially Mandelson received £400,000 by loaning it to himself and was required to charge only £15,211 on the balance – again to himself – and that entire sum flies under the radar of the taxman.

Honestly I can’t understand what in the world Mandelson was thinking, pulling such a stunt. Especially now, when the British political landscape is such a veritable minefield thanks to the pledges of the Conservatives to stamp out tax avoidance in order to close the revenue gap – and how HMRC has been sniffing about everywhere it can to squeeze as much blood from a stone as it possibly can, from contractors to major multinational firms.

I would really like to think that Mandelson didn’t do this just so he could avoid paying tax on that cash. Honestly it’s just a massive let down and it’s more than a little heartbreaking to see a man who many actually trusted as being a relatively honest politician play the same kind of financial games that other would do without compunction.

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