Pay tax on your gifts, top accountancy firm warns politicians amid Labour row

Politicians should pay tax on gifts in the same way that other industries and individuals do, a leading accountant has said.

Currently, firms and workers in sectors where gifting is commonplace and an element of their profession – such as the media industry or online influencers – are made pay to income tax and, in some cases, National Insurance Contributions on the gifts they receive.

But politicians are currently exempt from such a levy despite the gifts they receive often relating to their job.

With political donations being thrust into the limelight after several front-line politicians were found to have accepted thousands of pounds’ worth of gifts from donors, top City accountant Blick Rothenberg has called HMRC to standardise the law around how they are taxed.

Robert Salter, a director at the firm, said: “Some of the gifts given to politicians have been very significant and arguably have job-related elements to them. 

“For example, gifts which were officially given to support [Angela Rayner] in her capacity as Deputy Leader of the Labour Party or other gifts which appear designed to help promote a particular brand or company.”

Ms Rayner – who was made Deputy Prime Minister after the general election – attracted fierce criticism in the run-up to this week’s Labour Party Conference for her decision to use the New York flat owned by top Labour donor Lord Alli.

That donation was especially controversial, with some arguing it broke Commons rules after The Sunday Times reported that Sam Tarry, former Labour MP for Ilford South, had joined her for her stay.

Salter and Blick Rothenberg see little difference between gifts such as the holiday flat given to Rayner or the £18m flat that Keir Starmer was permitted to use during the election, and the promotional trips or grace and favour invitations offered to influencers.

“HMRC should consider treating the gifts which are provided to politicians in the same manner as other taxpayer gifts to ensure that the wider rules are as clear, simple and consistent as possible in this regard,” said Salter.

“Simply calling something a ‘gift’ and the absence of a formal employment contract with the other party, doesn’t make it tax-free. If a gift is taxable, it is taxable whether a direct cash payment or some type of ‘payment-in-kind (e.g. clothing or housing).”

The Treasury was contacted for comment.