Westminster Accounts: Lib Dem leader and ex-cabinet minister among MPs ‘avoiding taxes’ on second jobs

Published

2 years ago

January 12, 2023

admin

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.

Search for your MP using the Westminster Accounts tool

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.

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.

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.

Click to subscribe to the Sky News Daily wherever you get your podcasts

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”.

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.

‘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.

World

I felt I had to go back to help Gaza’s hospitals, says British plastic surgeon

Published

4 hours ago

June 19, 2025

admin

I felt I had to go back to help Gaza's hospitals, says British plastic surgeon

Dr Victoria Rose is a consultant plastic surgeon who worked in Gaza hospitals for two separate periods last year. This is her first-hand story of the war in Gaza.

The word “dire” does not adequately describe the situation in Gaza’s hospitals.

On a daily basis when I was working there, I had a list of at least 10 patients, and 60% of them were under the age of 15.

These were tiny children with life-threatening burns and limbs blown off, often losing significant family members in the attacks and left to cope with their life-changing injuries alone.

I first joined the charity IDEALS, which helps medical professionals during crises, in Gaza in 2019. I returned last year, working with orthopaedic surgeons.

I felt compelled to go back after becoming aware that a plastic surgeon from Gaza who trained with me in London had been inundated with complex trauma cases since the war broke out in October 2023.

Our aim was to deliver essential surgical equipment and assist our colleagues with the increasing trauma workload they faced. But as the war progressed, it became apparent that we had a third objective: to bear witness.

I worked at the European Gaza Hospital in March 2024 and then returned in August of that year for a month, working at Nasser Hospital.

The transformation of the landscape during these two visits was staggering. The streets were unrecognisable, just pile after pile of dust and rubble. Such a scale of destruction could only be justified if every single building in Gaza was part of Hamas’s infrastructure.

In February 2024, we were denied entry by COGAT – part of the Israel Defence Forces (IDF) controlling activities in the occupied territories – which, regrettably, has become a standard outcome for 50% of foreign doctors attempting to gain access. However, we managed to regain access in May.

This mission was intended to last four weeks at the European Gaza Hospital. However, due to its bombing on the day we arrived and its subsequent decommissioning by the IDF, we were redirected to Nasser for three and a half weeks.

The population had now been relentlessly displaced, bombed in their tents, deprived of water and sanitation, and ultimately starved. I remember thinking it couldn’t get any worse – and then they cut the internet.

We ploughed on without essential equipment such as painkillers and antibiotics, patching the patients up, knowing that they were likely to be bombed again.

When we left the hospital we went into the red zone – an area of active fighting that needed to be evacuated.

This meant that nothing could enter without the journey being “deconflicted” by the IDF. Minimal journeys have thus far been deconflicted. Patients struggle to gain entry, and staff cannot leave, as equipment continues to be depleted.

Nasser is the only hospital in the south equipped with a CT scanner, a blood bank, ICU capabilities and an oxygen generator.

I work with two orthopaedic surgeons who run the IDEALS charity. They have been travelling to Gaza since 2009.

IDEALS started the lower limb reconstruction programme in 2013, visiting Gaza every other month and bringing four orthopaedic surgeons back to the UK for short periods of training.

In 2021, I arranged for a plastic surgeon from Gaza to come to London to train with me. He was an incredible trainee and returned to Gaza in February 2023 to take up the post of chief of plastic surgery at Shifa Hospital.

Shortly after the war broke out, I felt compelled to help him.

All eyes are now on Israel’s next move.

Gaza: Doctors On The Frontline will air on Sky News at 9pm on 19 June

World

Amputations, badly burned bomb victims and lack of medicine: British surgeons on life in Gaza

Published

6 hours ago

June 19, 2025

admin

Amputations, badly burned bomb victims and lack of medicine: British surgeons on life in Gaza

Doctors are a very special category of people. Doctors who opt to work in war zones are an entirely different level of special.

They take their skills and medical experience into the most dangerous of environments, knowing they risk their own lives in their mission to save others. Yet they do this regardless.

Warning: This article contains details and images that some readers may find distressing.

The British doctors who we came to know and immensely respect at the centre of our report, Gaza: Doctors on the Frontline, don’t see themselves as heroes or even remarkable for what they’ve done over the past few weeks in Gaza.

That, of course, is what makes them even more remarkable.

“This shouldn’t be about us,” Dr Tom Potokar scolded us more than once.

“This should be about what’s happening to the Palestinians and health workers inside Gaza.”

But like it or not, the daily video blogs the travelling doctors did about their experiences on the ground in Gaza resonated with viewers.

They sent us searing accounts of their daily lives while in Gaza. They told us of having to stitch together mostly young broken bodies, torn apart by repeated Israeli bombs.

They talked of having to perform amputations on the young, of trying to stem the pain and infections on badly burned bomb victims and of the lack of common medicines.

They fumed at what they saw as political ‘complicity’ from the international community for not doing enough to end the war. They begged for aid to be allowed in.

They spoke from the heart as humanitarians and doctors but also witnesses – and we saw them tired, frustrated, angry at times, maybe a little anxious, certainly emotional.

And yet, all the time they realised how they were just visitors in Gaza while their patients, their medical co-workers and their colleagues’ families were all living this permanently, with no escape while just trying to survive. Many do not.

“What do you say to a seven-year-old who’s lost both her legs,” Dr Tom says in one heart-wrenching vlog.

“Most of my patients are children,” Dr Victoria Rose tells us in another. We see her fall in love with a badly burned toddler, so swathed in bandages, only his face was uncovered.

“This is my favourite little guy,” she says in her vlog about three-year-old Haitum, “he has 35% burns”.

“That’s a lot for a little guy,” she goes on. And the tens of thousands who watched her updates on social media platforms fell in love with the little boy too.

Viewers see how Haitum was far from an exceptional case too. “My first three patients today were under 12,” we learn from Dr Victoria in another post.

Read more from Dr Victoria Rose: ‘I felt I had to go back to help’

The two surgeons were in small teams sent into the battlefield courtesy of the IDEALS charity, which funded their trip.

Their limited time in the Gaza Strip turned out to be of an intensity which both recognised as unmatched before by either of them.

They witnessed alongside their patients and fellow medics, daily and nightly bombings; gunfire; dwindling medical supplies and saw the dire lack of food.

They treated tiny skeletal bodies desperate for sustenance – and helped mass evacuations of badly wounded patients from the fast-disappearing health facilities.

‘No one is safe’

“There just seems to be indiscriminate bombing,” Dr Victoria says of the Israeli bombardment. “No one is safe – whether you’re a woman, man, child or health worker.

“But there seems to be a systematic pattern of attacking infrastructure, particularly around health provision.”

She goes on to cite how she’s observed the Israeli attacks focus on taking out the hospital water supplies, then the power source, as well as declaring red zones or implementing evacuation orders around health facilities to make it difficult for patients to access the hospital and for staff to travel into work.

The Israeli authorities have an alternative narrative – the Israeli Defence Forces claim they are carrying out “precision strikes”, insist Hamas is using patients as human shields and say they’ve uncovered vast military command centres beneath hospitals – including the European Gaza.

Conflicting accounts

The doctors – equally insistently – say they’ve seen no arms in the hospitals and have seen no evidence of Hamas command centres or tunnels beneath.

Dr Tom rang me while our team was on assignment in Somalia. “You won’t have heard but the European Gaza Hospital has been bombed,” he said, “I’ll send you the videos”.

He shuns social media and has no accounts, but he’s a veteran who’s been travelling to Gaza for the past seven years, and he knew very well the importance of what he was witnessing on the ground and living through.

He’s extremely experienced and has travelled across the globe working in war zones like Cambodia and Lebanon, and is a former chief surgeon for the International Red Cross.

He’s also a burns specialist with his own international charity called Interburns. “If Cambodia was the killing fields, Gaza is the slaughterhouse,” he says about his most recent time inside Gaza.

Dr Victoria Rose is an NHS plastic surgeon based in London and was on her third trip to Gaza. She talks frankly of being motivated to go after helping to mentor Gaza surgeons who’d travelled to Britain to learn extra skills some years ago.

“We saw them struggling in Gaza and I felt I just had to help,” she explains. She videoed everything – unstintingly – and has her own Instagram handle @rosieplasticsurgeon.

She teases Dr Tom – on camera of course – about his lack of digital awareness. “This is the man who calls it Facetube, aren’t you Tom?”

The two have very different approaches but mutual respect. And both realised their job in Gaza was twofold. They had to bear witness. They had to report.

Running past huge craters

They had to provide insight into what fellow Palestinian medics are up against in Gaza; how hospitals – protected under international law – are being affected, and how ordinary Gazan civilians are suffering.

So, Dr Tom took us into the heart of the European Gaza Hospital minutes after Israeli forces dropped multiple bombs around the complex.

We saw him racing through the car park outside the Emergency Department and past huge craters and rubble.

He delivered commentary as he ran through the smoke-filled corridors to try to find his anaesthetist. He showed us the repeated bombings a day later – and the scramble to get injured patients out to safety.

The two surgeons may be very different people. But both are highly regarded in their fields and have been brought together by a burning desire to help the wounded and injured in Gaza as well as their fellow medics on the frontline.

They also both entered Gaza with the knowledge that foreign journalists are barred from the territory – and many of those inside have been killed or maimed – so it fell to them, the doctors, to be the witnesses during their stay in Gaza and beyond.

“It’s really not something I’m comfortable with,” Dr Tom said. “For a start, it takes up a lot of time! But it’s important people see what’s going on here.

“The question people should be asking is, why are foreign journalists being barred? What is it the Israelis do not want people to see?”

Analysis: Jonathan Levy – Israel’s block on international journalists in Gaza should not be allowed to stand

Dr Victoria texted a lot about her fears that Nasser Hospital, where the two travelling teams finally end up, may face the same fate as the European Gaza – evacuated and now out of action.

“We’ve got to keep on reminding people what’s going on here because Nasser is the last functioning hospital in the south, and if it has to be evacuated, it will have tragic consequences for the civilians here. Hundreds will die,” she says.

The film is a graphic, often painful watch of human endurance, tragedy, pain and survival – told through the eyes of two exceptional and inspiring surgeons who felt their duty as doctors also meant they should lay bare what’s happening inside the Gaza Strip – and what is still happening – while the world’s focus has shifted elsewhere.

Gaza: Doctors On The Frontline will air on Sky News at 9pm on 19 June

World

UAE says navigational error caused oil tankers to collide near Strait of Hormuz

Published

10 hours ago

June 19, 2025

admin

UAE says navigational error caused oil tankers to collide near Strait of Hormuz

A crash between two oil tankers on a major shipping route near the UAE was likely caused by a navigational misjudgement by one of the vessels, officials have said.

The Adalynn and Front Eagle tankers collided and caught on fire on Tuesday near the Strait of Hormuz, a narrow channel which connects the Persian Gulf to the Gulf of Oman.

Israel-Iran latest: Tehran warns US against intervention

In a statement issued today, the United Arab Emirates’ energy ministry did not draw any link between the crash and an upsurge in electronic interference amid the Israel-Iran conflict.

Interference has disrupted navigation systems near the strait since the two countries began firing missiles at each other last week.

The multinational US-led Combined Maritime Force’s Joint Maritime Information Centre said in an advisory this week that it had received reports of interference stemming from near Iran’s Port of Bandar Abbas and other areas in the Gulf region.

Tehran has not commented on the collision or reports of interference.

The UAE coastguard said it evacuated 24 people from the Adalynn, while personnel on Front Eagle were reported safe with no pollution visible after a fire on its deck.

The Strait of Hormuz – which handles around a fifth of the world’s seaborne oil – links the Gulf to the northwest with the Gulf of Oman, the Arabian Sea beyond.

The Adalynn, owned by a company based in India, had no cargo and was sailing towards the Suez Canal in Egypt, according to monitoring service TankerTrackers.com.

The Front Eagle was on its way to Zhoushan in China – and loaded with two million barrels of Iraqi crude oil, the tracker said.

TankerTrackers.com said on X that the Front Eagle was moving southbound at a speed of 13.1 knots when it “executed a starboard [right] turn, resulting in a collision” with the Adalynn.

The exact cause of the collision, which resulted in no injuries or spills, is still unclear.