Blair faces tax bill over Egypt holiday charity donation

Tony Blair faces a tax bill of hundreds of pounds after accepting a family holiday at a Red Sea resort paid for by the Egyptian government.

Opposition parties denounced the agreement under which Mr Blair took the hospitality in return for handing an undisclosed equivalent amount to charity. They are planning to table questions demanding details of the financial arrangements when the Commons returns next week.

The storm blew up after the Prime Minister recorded in the Register of Members' Interests that he and his family spent six days after Christmas at a hotel in Sharm-el-Sheikh as a "guest of the Egyptian government". He also listed flights from Cairo to Sharm-el-Sheikh as paid for by the Egyptians. The Prime Minister's Office is thought to have approved the deal after being advised by Foreign Office officials that to refuse would risk offending the Egyptians.

Mr Blair's donation is likely to have run into several thousand pounds. But Downing Street refused yesterday to disclose its size or the charity to which it had been paid. A spokesman said: "It's important that we don't reveal these details. We would be accused of seeking publicity if we did."

The free holiday will be regarded as a benefit in kind by the Inland Revenue. Maurice Fitzpatrick, head of economics for the accountancy group Tenon, said: "It may make him feel better, but the fact he made a donation to charity isn't relevant for tax purposes. In order to avoid it being a taxable benefit he would have had to have paid the Egyptian government in the first place ... If he had taken some tax advice ... he would have been advised to make the payment direct to the Egyptian government. As it is, he has fallen into a trap."

Norman Baker, the Liberal Democrat MP for Lewes, said: "We need a clear financial statement as to what he paid, to which charity and what he is doing about the tax implications."