Lord Ashcroft confirms 'non dom' status

(GETTY IMAGES)

Conservative donor Lord Ashcroft sought to end controversy over his tax status today by confirming he is a "non-dom".

The party vice-chairman insisted however that paying tax in this country had not, as critics had suggested, been a condition of his being granted a peerage in 2000.

And he said he would become "resident and domiciled" in the UK if the Tories win the general election and make that a condition of sitting in the Lords.

"While I value my privacy, I do not want my affairs to distract from the general election campaign," he said in a statement on his website.

Pre-empting the official release of some details of the undertakings he gave at the time of accepting his peerage from then Tory leader William Hague, he disclosed that he had agreed to "take up permanent residence again" in the UK.

"In subsequent dialogue with the Government, it was officially confirmed that the interpretation in the first undertaking of the words 'permanent residence' was to be that of 'a long-term resident' of the UK," he said in the statement.

"I agreed to this and finally took up my seat in the House of Lords in October 2000.

"Throughout the last 10 years, I have been declaring all my UK income to HM Revenue (sic). My precise tax status therefore is that of a 'non-dom'."

People with "non dom" status - often those with offshore interests - only pay UK tax on money earned in this country.

Tory leader David Cameron has refused to bow to sustained pressure to reveal the tax status of Lord Ashcroft, a major financial backer of the party's campaign in marginal seats.

Mr Cameron has pledged to bar non-doms from sitting in Parliament in future but has always insisted it was a private matter for the peer.

"I agree with this change and expect to be sitting in the House of Lords for many years to come," Lord Ashcroft said.

A Conservative Party spokesman said: "David Cameron has said that he respects people's privacy but he is pleased Lord Ashcroft has made this decision.

"It is clear therefore that Lord Ashcroft has the same status as several Labour donors including Lord Paul - recently appointed to the Privy Council on the recommendation of Gordon Brown's Government."

The long-demanded disclosure comes after a freedom of information watchdog ruled there was a "legitimate interest" for the public to know Lord Ashcroft's tax status.

Information Commissioner Christopher Graham criticised "evasive and obfuscatory" replies by senior politicians on the subject and ordered the publication of the 2000 undertaking.

There was a "legitimate public interest in understanding the process by which Lord Ashcroft's peerage was awarded, knowing the details of any conditions placed upon that award and knowing whether Lord Ashcroft has met what appears to have been a condition to his award", he ruled.

Ahead of that release, Lord Ashcroft published a letter he sent to Mr Hague on March 23, 2000 giving his "clear and unequivocal assurance" that he would take up permanent residence in the UK by the end of the year and had instructed advisers "to make arrangement to give effect to this".

"These are my solemn and binding undertakings to you."

There was no mention of tax status in the letter.

The peer said that, as another condition of his peerage, he resigned as Belize's permanent representative to the United Nations.

But he is reported still to have extensive business interests in the Central American state, leading political opponents to question whether he paid tax in the UK.

Among the most prominent has been Labour MP Gordon Prentice (Pendle), whose freedom of information request prompted the intervention of Mr Graham.

He called on Lord Ashcroft to resign his peerage.

"Ashcroft has dissembled for a decade, concealing the fact that he is a non dom.

"He promised to take up long-term residence in the UK as a condition of his peerage - and that means paying UK taxes like the rest of us.

"He has been bankrolling the Conservatives for years, buying the election with his huge wealth, most of which is untaxed in the UK.

"The man is a fraud and should resign from the House of Lords."

Home Secretary Alan Johnson said Lord Ashcroft's "unpatriotic" tax status undermined Mr Cameron's election campaigning.

"Yesterday David Cameron was saying it was his patriotic duty, very personally, about replacing Gordon Brown.

"His candidates are being funded by someone who is basically being unpatriotic because he has remained as a non-dom," he told the BBC.

"Today's announcement is a little bit of a bombshell in the sense that all of this talk about patriotism disappears into the ether when we find out what Lord Ashcroft has been doing."

Mr Johnson said non-dom Labour donors should "of course" examine their own status.

But he added: "Rather than look at other people in the Lords who have not been responsible for spending millions of pounds in marginal seats to try to get Tory candidates elected, we want to take a long hard look at the Conservative Party, a long hard look at how they are funded, now we know they were funded by a non-dom."