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Arron Banks, UK sovereignty and £163,000 in tax

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Brian CathcartLondon
Arron Banks, UK sovereignty and £163,000 in tax
European law should trump the British Parliament, says the alleged money-man behind Brexit – at least when it comes to taxes on his UKIP donations

Arron Banks has lost an appeal against the tax man in which he asked a tribunal judge to overrule British inheritance tax law on the grounds it failed to meet European standards.

The man who bankrolled much of the Leave campaign to ‘take back control’ from the EU (though the source of his funds is now the subject of a police investigation) had argued that EU law and the European Convention on Human Rights (ECHR) should trump tax legislation passed by the UK Parliament.*

At issue in the case were donations to UKIP totalling £976,781 made by Banks and his companies in 2014-15, on which HM Revenue & Customs required him to pay £162,945 in inheritance tax. (Who left Banks the money in the first place is not stated in the judgment.)

Through his counsel, Imran Afzal, Banks pointed out in hearings last March that under UK law donations to some other parties were exempt from inheritance tax and this amounted to discrimination against both him and UKIP, in breach of both ECHR rights and of the UK’s obligations under the EU’s Maastricht Treaty. Given this conflict, he urged the tribunal to overrule UK law and declare his 2014-15 donations exempt.

Tribunal Judge Ashley Greenbank has now refused to do so, explaining that he did not have the power to rewrite legislation passed by Parliament on such a matter. Parliament presumably knew what it was doing when it set thresholds for exempting donations to political parties from inheritance tax, he indicated, and so any changes would be a matter for Parliament.

It is ironic, to say the least, that Banks, a man so committed to UK sovereignty that he ostensibly invested millions in the Brexit campaign, should have wanted UK law rewritten to comply with European standards for the sake of £163,000.

The irony is all the starker given the battery of arguments deployed on his behalf. Banks and UKIP were victims of discrimination because of their political opinions, it was said. Banks’s right to freedom of expression had been breached. A whole list of European institutions and documents were cited in support of him. It was a ‘duty’ of the tribunal to ensure UK legislation operated ‘in a manner that is consistent with ECHR rights’. UK law also breached principles of democracy and equality enshrined in the Maastricht Treaty, to which the UK had an obligation to conform.

Afzal even furnished the tribunal with a list of ways in which he said they could rewrite the UK’s Inheritance Tax Act – of which the judge noted that all would ‘conveniently allow Mr Banks’s donations to qualify for exemption’.

It may be no less ironic that, in almost every respect except the essential one, the tribunal showed sympathy for Banks. On the face of it, the judgment conceded, it was indeed unfair that UKIP and its donors did not enjoy the same exemption as the Conservatives, Labour and other more established parties. (UKIP fell short of the threshold principally because none of its candidates was elected to Parliament in the general election of 2010, even though the party received more votes nationally than others whose candidates did win seats.)

It made no difference. The judgment states: ‘The question is therefore whether it is possible for the Tribunal to interpret or re-write s24 [of the Inheritance Tax Act] in a manner which sets conditions which are compliant with ECHR rights.’ And to that question the answer was no. 


*The case was appeal number TC/2017/03763 at the Tax Chamber of the First-tier Tribunal, where HMRC rulings are contested, and the judgment against Banks carries a ‘release date’ of 15 October, though it does not yet appear to have been made available to the public.

#Arron Banks, #Inheritance Tax, #Brexit, #UKIP, #irony, #hypocrisy, #ECHR, #Maastricht Treaty, #EU, #HMRC

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