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Two dozen MPs since 2016 have been paid for second jobs through personal service companies they have set up, a Sky News investigation has found.

It means these MPs can exploit the fact that tax rates on companies differ from those on employment, enabling them to reduce their tax bills on second jobs.

This practice is legal and common in certain industries, but some MPs appear to have taken further steps to reduce their taxes on non-parliamentary earnings.

Lib Dem leader Sir Ed Davey is one of 12 MPs to have received earnings from second jobs via companies owned partly or solely by their spouse, an arrangement accounting experts have said is often used to reduce taxes.

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Sir Ed and his wife also appear to have taken advantage of a loophole that allows reduced tax rates to be paid on money taken out of a company when it’s closed. More than £100,000 was sitting on the balance sheet of the company through which Sir Ed received payment for five second jobs held between 2017 and 2022, before the company was liquidated earlier this year.

Ex-cabinet minister Ranil Jayawardena, another to receive earnings from second jobs via a company owned with his wife, claims to have been doing two separate roles with the same company at the same time between 2017 and 2020 – an arrangement that may have afforded him further tax benefits.

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Sky News spoke to more than half a dozen tax and accounting experts who confirmed that, while all payments are likely lawful, MPs can use these methods to reduce taxes on their earnings from second jobs.

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Use of personal service companies enables taxes to be minimised

By setting up companies through which they offer their consultancy services – known as personal service companies – MPs pay corporation tax and dividend taxes on their non-parliamentary work, rather than income taxes, as they do on their MP salary.

In receiving money this way, some MPs can reduce their tax rate by around 5% on their additional jobs, depending on how much they’re earning.

But using these companies enables additional ways through which taxes can be minimised.

Giving spouses or other family members a salary or shares in the MP’s business can further reduce tax bills. If the family member is a basic rate taxpayer, they would pay tax rates almost four times lower on dividends received from the company than an MP, who are higher rate taxpayers.

Of the 24 MPs using these companies, 12 list a family member as a shareholder or director.

But perhaps the biggest tax benefit when using a personal service company comes when earnings from second jobs are built up in the company before it is closed down and liquidated.

Under these circumstances, tax rates on additional earnings for MPs – who pay 40% tax on the upper end of their £84,144 MP salary – can be as low as the 10% capital gains tax rate paid on assets when a company is closed.

Three MPs have liquidated companies through which they were receiving their second earnings and two of these – Sir Ed Davey and Robert Butler – had significant amounts of cash on the balance sheet when the companies were closed.

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Energy Destinations Ltd, the company Sir Ed’s earnings were paid into, was closed in June this year with £103,717 of assets distributed upon its liquidation. The company was previously transferred from Mr Davey to his wife in 2017, but he continued to receive more than £350,000 in payments from second jobs into the company until earlier this year.

‘It’s perfectly legal, but is it fair?’

HMRC introduced rules in 2016 to stop the practice of opening and closing companies as a means of obtaining relief.

The tax break can still be used however as long as the business owner doesn’t open a new company within two years doing similar work.

Ian Dickinson, tax director of UHY Hacker Young, said of people taking active steps in this way to reduce taxes on their work:

“It’s within that parameter of tax avoidance, which is perfectly legal, but is it fair?

“If you’ve got people exploiting the rules trying to pay as little as possible, using convoluted structures, that are well known but beyond the remit of the normal person, it just doesn’t sit right.”

Experts have criticised the wider system that encourages these arrangements. Judith Freedman, emeritus professor of taxation law and policy at the University of Oxford said: “We have a poorly designed tax system. We should be taxing people operating through different legal forms in far more similar ways.

“There’s the fact that you can convert your labour income into capital. That’s a problem. There’s the fact that you can income split. That’s a problem. And there’s the fact that you don’t pay any national insurance on dividends. That’s a problem”.

Read more:
SNP demands ‘root-and-branch’ reform of MPs’ outside earnings
‘The next big scandal’ – Informal groups of MPs given £20m from external organisations since 2019

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Could all-party parliamentary groups represent ‘next big scandal’?

MPs run the risk of breaking the rules

A spokesperson for Sir Ed said: “All of Ed’s business was entirely in keeping with the rules, and he has been fully transparent about it.

“Money that his wife earned also went into the company. All capital gains tax due on the proceeds will be paid.”

People close to Sir Ed were also keen to point out that the Liberal Democrat leader’s earnings helped fund care for his disabled son.

While the use of personal service companies to manage second-job earnings is legal, there is one area where tax experts have told Sky News that some MPs could be running the risk of breaking rules.

It relates to whether MPs’ second jobs are considered consultancy roles or whether they are deemed employment by a company. If the latter, additional taxes are likely due when receiving earnings through their own companies.

Three MPs – Mark Pritchard, Ranil Jayawardena, and Ed Davey – have taken on jobs that HMRC considers employment – non-executive directorships – while still receiving fees for these jobs through their companies.

It is possible to make a voluntary declaration to HMRC to ensure the correct taxes are paid on these jobs, but experts said that people typically rarely do so when receiving fees via a company. In these circumstances the company is an “unnecessary structure”, according to employment status expert Rebecca Seeley-Harris, although there is no evidence to suggest these three MPs have not made the required voluntary declaration.

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‘Ban MPs from working second jobs’

‘A dangerous operation’

Former environment secretary Mr Jayawardena had a particularly unusual arrangement, where he appears to have done two different jobs for the same company at the same time between 2017 and 2020.

His personal service company received share options valued at £20,000 per year from pharmaceutical company PepTCell Ltd in return for providing “a non-executive director for approximately four days a year”, according to his entry in the register of members’ financial interests. Companies House filings confirm Mr Jayawardena was a director of PepTCell.

But Mr Jayawardena also declared a second role as a strategic consultant with PepTCell at the same time, with his own company again receiving share options valued at £20,000 in return for four days work per year.

Ms Seeley-Harris noted that an arrangement like this would need to have clear delineations to ensure there weren’t tax issues, but that the nature of the two roles made this difficult.

“If you’re both a consultant and a non-executive director (NED), the consultant work has to be an entirely different piece of work. So you can’t give strategic advice to a company that you’re a non-executive director of, where your job as an NED is to give strategic advice.

“I’m surprised in this day and age that the accountants aren’t advising them that they can’t do that, it’s such a dangerous operation.”

Mr Jayawardena didn’t respond when asked for comment by Sky News.

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Terror group supporters posted on TikTok, YouTube and Google from site targeted in Indian airstrikes

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Terror group supporters posted on TikTok, YouTube and Google from site targeted in Indian airstrikes

Social media accounts expressing support for a Pakistan-based terror group linked to al Qaeda appear to have posted recent videos from a Pakistan mosque targeted by Indian airstrikes.

Sky News has found videos posted on TikTok, YouTube and Google that appear to be filmed at the Markaz Taiba Mosque in Muridke. The captions and usernames contain expressions of support for the Lashkar-e-Taiba (LeT) and a group called ‘313’.

Sky News has found and geolocated multiple videos that appear to be filmed in the area where the captions include either or both ‘313’ and LeT.

Some of the videos show men in the streets with guns. Another post captioned a video of children doing martial arts training inside the targeted mosque, “we are little soldiers, and we fight the non-believers”.

The caption of the video reads "we are little soldiers, and we fight the non-believers". It uses the hashtag '313' and uses the word 'mujahid' which means 'who does jihad'.
Image:
The caption of the video reads ‘we are little soldiers, and we fight the non-believers’. It uses the hashtag ‘313’.

The caption uses the hashtag #جہاد313, which translates to ‘313’ jihad.

‘313’ appears to refer to the 313 Brigade, a proscribed terror organisation in Pakistan.

In a TikTok video posted to the Google page for Markaz Taiba Mosque in Muridke, a man can be seen walking along the street with a gun.

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The account that posted that video wrote in their description, “Lashkar Taiba, Mujahid Force, ‘313’ and Markaz Taiba Muridke”, self-proclaiming their support for the groups.

This screenshot from a Google user labels Lashkar-e-Taiba and ‘313’ and claims to be from Muridke.
Image:
This screenshot from the Google user labels Lashkar-e-Taiba and ‘313’ and includes the location name Muridke

India’s retaliatory strikes on Pakistani-adminstered Kashmir and Pakistan on 7 May came after a deadly attack in Indian-administered Kashmir last month.

Gunmen opened fire on tourists, killing 26 people and injuring dozens in a popular holiday spot near Pahalgam, Kashmir, on 22 April.

LeT were accused by India of involvement in the Pahalgam attack through their proxy the Resistance Front, which claimed responsibility for the attack.

LeT, which is designated as a terrorist organisation by the UN Security Council and the UK, focuses on fighting Indian control in Kashmir and is based in the Punjab region of Pakistan.

Pakistan denies allegations of terror camps operating in the country. This region has been in the control of the Punjabi government since 2010. The Punjab government condemned the Indian strikes, and declared a state of emergency across Punjab.

Muskan Sangwan, senior intelligence analyst at TRAC, a terrorism research and analysis consortium, told Sky News: “Brigade 313 is al Qaeda in Pakistan. It’s an umbrella organisation for members of several groups like Taliban, Lashkar-e-Jhangvi, Haqqat ul-Jihad-al-Islami, Jaish-e Muhammad, Lashkar-e-Taiba, and Jundullah.”

Ms Sangwan explained that ‘313’ refers to the number of companions said to have fought with the Prophet Mohammed in the Battle of Badr.

TRAC have seen a recent uptick in TikTok videos and other social media posts that refer to ‘313’.

Many of the accounts are linked to each other.

Ms Sangwan said: “They [the TikTok users] mostly use ‘313’ as a hashtag… trying to push that hashtag to as many people it can reach on social media.”

Sky News sought to verify the location by comparing before and after videos from the strike location, and using the video released by the Indian army conducting the strike.

One video showing damage at the strike location was posted by a user with 313 in their TikTok username.

The TikTok account that posted video footage of the destruction of the mosque has 313 in their caption.
Image:
The TikTok account that posted video footage of the destruction in Muridke has 313 in the username

Below is satellite imagery that shows the destruction of the site.

Satellite imagery shows Markaz Taiba Mosque after the strike on May 7th. Credit: Maxar.
Image:
Satellite imagery shows Markaz Taiba Mosque after the strike on 7 May. Credit: Maxar

In one TikTok, the video is captioned “bring your arms and ammunition and go to war”. The text on the screen of the TikTok is ‘313’ and he is carrying a gun.

The group are comfortable with having an online presence. On the Google tag for Markaz Taiba Mosque in Muridke, men pose for a group photo. Almost all the people in the photo have used ‘313’ on TikTok.

Ms Sangwan explained: “With these people from Muridke, pushing this propaganda on social media would generate a lot of significance in terms of recruitment and in terms of gaining support from local people and from other people.”

Sky News’ Asia correspondent Cordelia Lynch has reported on the ground in Muridke.

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Anger in Pakistan after India strikes

India says it struck Markaz Taiba, a site in Muridke about 15 miles (25km) from the border, which has long been claimed to be a terrorist training site associated with LeT.

MEMRI, a US-based research group that monitors terrorist threats, told Sky News: “It has been known for decades that Lashkar-e-Taiba has its headquarters in Muridke.”

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Sky News contacted the Pakistan Ministry of Defence for comment. Khawaja Asif, Pakistan’s defence minister, told Sky News: “This appears to be a random video with background music added later – consistent with how TikTok trends often function. If this is to be considered credible evidence, we could produce millions of similar clips ourselves.”

Mr Asif also said that any suggestion that the mosque was used as a base by terrorists was a “completely false, social media made up hoax”.

On 7 May, after the strikes in Pakistan, the Indian subcontinent branch of al Qaeda issued a statement condemning India’s actions and encouraging its supporters to wage jihad against India.

The Data and Forensics team is a multi-skilled unit dedicated to providing transparent journalism from Sky News. We gather, analyse and visualise data to tell data-driven stories. We combine traditional reporting skills with advanced analysis of satellite images, social media and other open source information. Through multimedia storytelling we aim to better explain the world while also showing how our journalism is done.

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Putin wants direct talks with Ukraine, but Zelenskyy and allies demand 30-day ceasefire from Monday

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Putin wants direct talks with Ukraine, but Zelenskyy and allies demand 30-day ceasefire from Monday

Russia’s president has suggested fresh peace talks with Ukraine in Istanbul as part of “direct negotiations” but also “without preconditions”.

Vladimir Putin put forward the proposal as European leaders including Sir Keir Starmer threatened him with fresh sanctions if Russia failed to comply with an unconditional 30-day ceasefire starting on Monday.

Kremlin spokesperson Dmitry Peskov told CNN that Moscow will need to consider those terms.

On Saturday the prime minister met Ukrainian President Volodymyr Zelenskyy alongside French President Emmanuel Macron, recently elected German Chancellor Friedrich Merz and Polish Prime Minister Donald Tusk in Kyiv.

Speaking at the Kremlin in the early hours of Sunday, Mr Putin did not directly address the 30-day ceasefire proposal but instead offered to restart peace talks Russia and Ukraine held in 2022.

Russian President Vladimir Putin gestures as he speaks to journalists in the Grand Palace at the Kremlin in Moscow, Russia, Sunday, May 11, 2025, after celebrations of the 80th anniversary of the Soviet Union's victory over Nazi Germany during World War II. (Sergei Bobylev/Photo host agency RIA Novosti via AP)
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Vladimir Putin told reporters he was committed to talks. Pic: RIA Novosti/AP

“We propose the Kyiv authorities resume the negotiations they interrupted at the end of 2022… to resume direct negotiations… without any preconditions… to begin without delay next Thursday 15 May in Istanbul,” he said.

Russia’s own unilateral three-day ceasefire, declared for the 80th anniversary of victory over Nazi Germany, expired on Saturday, and Ukraine said Russian forces have repeatedly violated it.

European leaders hold call with Ukraine. Pic: Number 10
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European leaders including Volodymyr Zelenskyy hold call with Donald Trump. Pic: Number 10

During the summit in Kyiv, European leaders secured the backing of Donald Trump after briefing him on the progress made on the so-called “coalition of the willing” plans in a 20-minute phone call.

“All of us here, together with the US, are calling Putin out,” said Sir Keir.

“So we are clear, all five leaders here – all the leaders of the meeting we just had with the coalition of the willing – an unconditional ceasefire, rejecting Putin’s conditions, and clear that if he turns his back on peace, we will respond.

“Working with President Trump, with all our partners, we will ramp up sanctions and increase our military aid for Ukraine’s defence to pressure Russia back to the table.”

Britain's Prime Minister Keir Starmer meets with French President Emanuel Macron and German Chancellor Friedrich Merz on board a train to the Ukrainian capital Kyiv where all three will hold meetings with Ukrainian President Volodymyr Zelensky, May 9, 2025. Stefan Rousseau/Pool via REUTERS
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Sir Keir Starmer, Emmanuel Macron and Friedrich Merz travelling in the saloon car of a special train to Kyiv. Pic: Reuters

Leaders arrive in Kyiv by train. Pic: PA
Image:
Leaders arrive in Kyiv by train. Pic: PA

It comes after President Trump called for “ideally” a 30-day ceasefire between Kyiv and Moscow, and warned that if any pause in the fighting is not respected “the US and its partners will impose further sanctions”.

During Mr Putin’s statement on Sunday, he insisted he would support peace talks: “We are committed to serious negotiations with Ukraine.”

He told reporters: “Their purpose is to eliminate the root causes of the conflict, to establish a long-term, lasting peace. We do not rule out that during these negotiations it will be possible to agree on some new truces, a new ceasefire.”

Putin cobbles together response to 30-day ceasefire demand

The Kremlin billed this as a meaningful statement from Vladimir Putin but how much does it actually mean?

His comments are exactly the same as what Moscow has been saying for weeks, only repackaged with a date. The latest attempt to avoid committing to a 30-day ceasefire.

Next Thursday – 15 May – is when he’s proposing to hold direct talks with Ukraine. Only then, he says, can they discuss the details of a longer truce.

Istanbul is apparently the venue. The trouble is, Turkey doesn’t appear to know about it. The Russian leader said he’d call President Erdogan tomorrow.

Given America’s apparent support for Europe’s ultimatum to Russia (ceasefire or sanctions), he had to respond with something new.

But this felt like a proposal that had been hastily cobbled together in the corridor outside.

Read more from Ivor here.

Security and defence analyst Michael Clarke told Sky News presenter Samantha Washington the European leaders are “rowing in behind” the US president, who referred to his “European allies” for the first time in this context in a post on his Truth Social platform.

“So this meeting is all about heaping pressure on the Russians to go along with the American proposal,” he said.

“It’s the closest the Europeans and the US have been for about three months on this issue.”

Trump calls for ceasefire. Pic: Truth Social
Image:
Trump calls for ceasefire. Pic: Truth Social

Mr Zelenskyy told reporters the agreed ceasefire should cover air, sea and land, and said that if Moscow refused, Russia would face new sanctions, including the strengthening of punitive measures targeting its energy and banking sectors.

The European leaders said the terms of a peace deal would be negotiated during the 30-day pause in fighting.

But the Ukrainian president said: “We have no illusions that the ceasefire will be breached.”

Mr Macron said the proposed ceasefire would be monitored mainly by the US and European countries and there would be “massive” sanctions if Russia did not agree.

Sir Keir Starmer and Volodymyr Zelenskyy during a meeting in March. Pic: AP
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Sir Keir and Volodymyr Zelenskyy during a meeting in March. Pic: AP

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Putin’s Victory Day parade explained

Military officers from around 30 countries have been involved in drawing up plans for a coalition, which would provide a peacekeeping force in the event of a ceasefire being agreed between Russia and Ukraine.

This force “would help regenerate Ukraine’s armed forces after any peace deal and strengthen confidence in any future peace”, according to Number 10 Downing Street.

Read more:
Will Trump force Putin to comply with ceasefire?
Russia’s VE Day parade felt like celebration of war
Michael Clarke Q&A on Ukraine war
Ukraine and Russia argue over ceasefire breaches

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Mr Peskov accused European leaders of making contradictory and confrontational statements, according to Interfax news agency.

“We hear many contradictory statements from Europe. They are generally confrontational in nature rather than aimed at trying to revive our relations. Nothing more,” he was quoted as saying.

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Pope prays at tomb of predecessor during first outing since election

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Pope prays at tomb of predecessor during first outing since election

Pope Leo XIV made his first outing since his election on Saturday, making a surprise stop to pray at the tomb of his predecessor.

On Saturday afternoon, the new pontiff travelled to a sanctuary dedicated to the Madonna in the town of Genazzano.

The sanctuary is managed by Augustinian friars, the order the pope belongs to, and has been a place of pilgrimage since the 15th century.

The pontiff’s namesake. Pope Leo XIII, elevated it to a minor basilica and expanded its convent in the early 1900s.

Pope Leo XIV is cheered by residents of Genazzano , near Rome on 10 May. Pic: Vatican Media/AP
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Pope Leo XIV is cheered by residents of Genazzano , near Rome on 10 May. Pic: Vatican Media/AP


After praying, Leo greeted the faithful gathered outside and offered a blessing.

On his way back to the Vatican, he stopped to pray at Pope Francis’s tomb at St Mary Major Basilica.

Earlier in the day, Leo held his first formal audience and said the Catholic Church must take the lead in facing threats to workers, such as AI.

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The 69-year-old said the technology posed “new challenges for the defence of human dignity, justice and labour”.

Pope Leo XIV identified AI as major challenge to humanity. Pic: Vatican Media/AP
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The Pope identified AI as a major challenge to humanity. Pic: Vatican Media/AP

The leader of the world’s 1.4 billion Catholics referred to AI as he explained his choice of name to the cardinals who elected him.

He said he identified with his namesake Pope Leo XIII, who was pontiff from 1878 to 1903 and addressed workers’ rights and capitalism at the dawn of the industrial age in the 1891 encyclical Rerum Novarum.

The late pope, who laid the foundation for modern Catholic social thought, criticised both laissez-faire capitalism and state-centric socialism.

“In our own day, the church offers everyone the treasury of its social teaching in response to another industrial revolution and to developments in the field of artificial intelligence that pose new challenges for the defence of human dignity, justice and labour,” Leo said.

The Pope also made clear he will follow in the modernising reforms of his predecessor Pope Francis to make the Catholic Church inclusive, attentive to the faithful, and an institution that looks out for the “least and rejected”.

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Read more from Sky News:
Trump says India-Pakistan ceasefire agreed
Ukraine presses Russia for truce

Leo said he was fully committed to the reforms of the Second Vatican Council, the 1960s meetings that modernised the church.

Toward the end of his pontificate, Francis became increasingly vocal about the threats to humanity posed by AI and called for an international treaty to regulate it.

Francis brought his message to the G7 summit of world leaders last year, insisting AI must remain human-centric so decisions about when to use weapons or even less-lethal tools always remain made by humans and not machines.

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