Limited

Andrew Pierce writes:

David Miliband was a member of Gordon Brown’s Cabinet that slapped a 50p tax rate on people earning more than £150,000 a year. This was seen as part of Labour’s ‘class war’ aimed at shoring up the party’s core working-class support. Of course, few of those Cabinet class warriors would have expected to be affected personally by the new top rate of tax. But how interesting it is to learn that Miliband (who resigned from front-line politics in a sulk after his younger brother Ed ‘stole’ the Labour leadership from him) has moved to protect himself from HM Revenue & Customs.

Quietly, he has set up a company called ‘The Office of David Miliband Limited’, which will be a tax-efficient vehicle for his non-parliamentary earnings. This means that all payments the former Foreign Secretary receives from commercial speaking engagements and other lucrative private work will be paid into the firm. It will be subject to corporation tax of 20 per cent (rather than the 40 per cent rate Miliband would have to pay on his income as an individual taxpayer).

This clever tax-planning could offer a further advantage if Miliband offsets expenses incurred in the course of his non-MP business against any profits. Miliband is clearly a canny operator when it comes to tax. In the past, he exploited a Revenue loophole to reduce the family’s total death duty bill by using a so-called ‘deed of variation’ in respect of his childhood home. I wonder what Miliband’s late Marxist father would say about his socialist sons making use of one of the capitalists’ favourite tax-avoidance devices (albeit a perfectly legal one)?

Already, the money has started rolling into Miliband Inc. As non-executive vice-chairman Sunderland Football Club, he gets £75,000 a year and there was a £25,000 fee for a lecture at the Emirates Centre For Strategic Studies in Abu Dhabi.