Labour party donor giving up non-dom status to pay full tax in UK

Published on Tuesday 9 March 2010 21:34

LABOUR donor Lord Paul yesterday said that he would give up his non-dom status and pay full tax in the UK.

The millionaire peer announced the move amid continuing fallout from the row over Conservative donor Lord Ashcroft.

He also revealed police have dropped their investigation into his expenses claims – although the watchdog in the upper house immediately reacted by launching its own inquiry.

Lord Paul has come under fire since the controversial admission last week by Lord Ashcroft, the Tories' deputy chairman, that he is still a non-dom, despite having pledged to become a permanent resident ten years ago.

Lord Paul, an Indian-born steel magnate, was the biggest backer of Mr Brown's Labour leadership campaign in 2007 and has given hundreds of thousands of pounds to the party over the years.

But he has insisted it is "ridiculous" to compare his situation to Lord Ashcroft's because he has always been open about his status.

In a statement yesterday, Lord Paul put an end to speculation that he may quit parliament rather than comply with pending legislation stating that peers must pay UK duty on all their income.

"On the issue of the taxation position of peers, of course it goes without saying that I will be fully complying with the change in the law which the government is bringing forward," he said.

Scotland Yard began examining Lord Paul's expenses at the end of last year, in the wake of allegations that he nominated a flat he had never stayed in as his main home, allowing him to claim tens of thousands of pounds for his London property.

But the peer said: "I am delighted to be able to announce today that the Metropolitan Police Service has informed me that it has decided that, after due consideration, it will no longer be proceeding with any investigation or inquiry in relation to my House of Lords expenses. I very much welcome the police's decision"