Thursday, March 11, 2010
Lord Paul, a Labour member of the House of Lords and a major financial backer of the UK's governing party, has said that he intends to relinquish his non-domiciled status for tax purposes and pay full UK taxes on his income.
Lord Paul's gesture comes after Lord Ashcroft, a Conservative Party peer who has bankrolled the party's electoral campaign in marginal seats, finally came clean about his status as a 'non-dom' last week.
Pressure is rising on wealthy British politicians to become more transparent about their tax affairs with the onset of new rules forcing all sitting members of the UK parliament to relinquish non-dom status, which enables them to escape UK tax on their offshore earnings as long as it it not remitted back to UK. These requirements, contained in the Constitutional Reform and Governance Bill, are currently progressing through Parliament with cross-party support.
Lord Paul, who is of Indian birth, made his fortune through Caparo Steel, which he founded and still chairs. He was the largest contributor to Gordon Brown's bid to become Prime Minister in 2007.
The Labour peer revealed that he would be ending his non-dom status from the next tax year, which starts on April 6, in an interview with the British political magazine The New Statesman.
"It goes without saying that I'll be fully complying with the change of law which the government is bringing forward," Lord Paul told the magazine's Mehdi Hasan, adding that he "strongly supports" government proposals in relation to the taxation status of peers and Members of Parliament.