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Party Political donation avoided £1.5m tax bill

A former Labour councillor John Mills gave the Labour Party shares in his shopping channel JML worth £1.56m in January, which he said, was the most "tax efficient" approach and that it had been agreed after a discussion with party figures.

He told a national newspaper that giving a donation in cash would have meant the Government taking almost half in tax.

"To be honest with you, it is the most tax efficient method of doing this. Because otherwise you get no tax relief on donations to political parties for understandable reasons," he said.

Mr Mills' donation is the biggest from an individual so far this year and is the only one to a major political party to have been made in shares, according to the newspaper.

It said that accountants had estimated the businessman is likely to have avoided nearly £1.5m in tax on the value of the stock he handed over.

Labour has defended the unusual method, insisting it had been "declared in full" to a party funding watchdog and complied with the rules.

A spokesman for the Electoral Commission said: "The Labour Party did contact the Electoral Commission prior to accepting the donation and we advised them that they could accept the donation subject to carrying out the necessary permissibility checks on the individual.

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