The party was last night accused of hypocrisy for taking advantage of loans from offshore firms, after the Prime Minister criticised Jimmy Carr, the comedian, for using a tax avoidance scheme in Jersey, reports The Telegraph.
The Conservative Party accepted the two loans on favourable terms from companies in known tax havens before the last election.
One £250,000 loan came from Juniper Trading, registered in the British Virgin Islands. It was given in 2004 at 0.25 per cent below the base rate, to be repaid in 2029.
Another £950,000 loan was made by the Medlina Foundation, based in Liechtenstein, at the base rate plus 1 per cent in the same year.
Last night a Tory spokesman said: “These are historic loans from before David Cameron was Conservative Party leader. The Conservative Party no longer accepts loans from non-UK trading companies.”
John Mann, the Labour MP for Bassetlaw, said Mr Cameron ought to hand back the money. “It would be the height of hypocrisy if he didn’t return those loans immediately. I’m sure it’s an oversight that he’ll pay attention to straight away to demonstrate his consistency.”
Yesterday Carr admitted making a “terrible error of judgment” over his tax arrangements, and announced he had pulled out of the K2 scheme that cut his bills by more than £1 million a year.
Mr Cameron backtracked on his criticism by claiming he only intended to condemn the most “aggressive” tax avoidance schemes.
He also refused to pass judgment on Gary Barlow, the singer and a Conservative supporter, who has also been accused of using a scheme to avoid paying millions of pounds to HM Revenue & Customs. “I am not going to give a running commentary on different people’s tax affairs,” Mr Cameron said. “I don’t think that would be right. I made an exception yesterday because it was a very specific case where the details seemed to have been published and it was a particularly egregious example of an avoidance scheme that seemed to me to be wrong and I made that point.”
Mr Cameron said the rules were clear and there were ways of reducing bills in a “sensible” manner. “In terms of people’s tax affairs, as I said yesterday, of course people can plan their tax affairs, put money into their pension and that can have an effect on your tax bill and the rest of it.”