This is our truth, tell us yours
Jeremy Corbyn’s tax return is a mess of a story, and with the characteristic clumsiness that defines his leadership Jeremy Corbyn has turned an open goal into an own goal.
British tax law is a mess. Everyone’s agreed on that.
One particularly cluttered and messy area of it is what’s known as office holding. A few years ago the Inland Revenue had to lobby for a change to tax law to ensure that office holders (such as company officers) did not gain a tax advantage over employees. It did this not by abolishing the venerable classification of office holding, but by tinkering with processes, rates and allowances.
Anyone who’s ever spent time with local councillors (who are not employees) or parish clerks (who are often both employees and office holders) or CIU social club secretaries (officeholders) will know that their tax status is a mess which IR tries to fix by ignoring the separate status and treating their fees or allowances for holding office as if they were wages.
Office holding is defined by case law, which tends to move incrementally. Depending on how you read the case law company directors, company registrars, trustees, part-time NHS hospital consultants and sub-postmasters are officers, but barristers’ clerks and Government-appointed inquiry inspectors are not.
HMRC’s employment status manual says that the following also are (or may be) officers: company secretaries, clergymen, coroners, chairmen and members of tribunals, local veterinary inspectors, and officials of social clubs (where elected under their constitutions). Others can be found in the manual’s section on particular occupations, e.g. parish clerks, judges and electoral returning officers.
Members of the House of Commons, the European Parliament and the devolved assemblies in Scotland, Wales and Northern Ireland, and local councillors are generally considered to be officers. The rules on clergymen are even weirder. All of this though lends support to the argument that the Leader of the Opposition holds office, not employment, and should declare their income differently.
Jo Maugham QC, a specialist in tax avoidance cases, doesn’t see it this way, and argues that because the act of parliament that sets out the leader of the opposition’s allowances calls it a salary it must be one. With the greatest of respect to the learned gentleman, it’s never been the case that employment status is decided by either party to the arrangement, but on the facts, and the facts seem to support Corbyn’s argument that his allowance is payment for holding office, not earnings from employment.
So why are people howling at Corbyn? For the same reason as dogs lick their testicles. Because they can. Giving Corbyn chance to explain is less fun than raging at him.
Corbyn’s team should know that. It would be far better if, when releasing the tax return, they had pointed out the confusing distinction between holding office and being an employee, and called for its abolition, for tax purposes, while reinforcing it for employment law purposes.
They didn’t. In the process they turned an open goal into an own goal.