Daily Telegraph’s attack on Danny Alexander is rich

On Friday the Guardian ran this piece from me:

Telegraph’s attack on Danny Alexander is rich
Danny Alexander’s behaviour wasn’t a patch on the sort of tax avoidance measures the Telegraph repeatedly recommends

On Monday the Daily Telegraph‘s personal finance editor, Ian Cowie, wrote of the paper’s story about Liberal Democrat MP Danny Alexander and his use of a capital gains tax exemption: “News that the chief secretary to the Treasury, Alexander, avoided paying capital gains tax when he sold his taxpayer-funded second home at a profit reminds us – yet again – that politicians are playing by a different set of rules from the rest of us”.

Superficially that sounds reasonable. Surely MPs should follow the same rules as the rest of us? It’s certainly my view. But taking a closer look at his piece I noticed a strange entry in the recent posts section: “10 tips to beat capital gains tax before the budget”. That link has now gone, displaced by more recent posts, but you can still read the story on the Telegraph website [since removed].

It, too, is a piece by Ian Cowie, from May 2010, which lays out in detail how Telegraph readers can avoid paying capital gains tax. It even says: “Do as MPs do and ‘flip’ your home … large potential CGT liabilities can be avoided quite legally in this way.” The story goes on to urge a full exploitation of expenses and maximise the use of exemptions. It is a list of recommendations that goes well beyond what Alexander did.

And it’s no rare exception, because the Telegraph has repeatedly run pieces giving advice on how to avoid capital gains tax, including using ‘flipping’.

Back in June 2007 it published a 10-point plan to minimise capital gains tax, approvingly quoting a tax advisor who said: “It is possible to reduce a tax bill of a few hundred thousand pounds to virtually zero.”

The plan urges people to claim expenses, “exploit personal allowances” and even talks about how you can briefly move in and out of a property in order to claim the 36 months exemption. That, of course, is the same exemption as the one Alexander used – save that he didn’t briefly move in and out of a property just to get a tax break.

So Alexander’s behaviour was not only, as the Telegraph conceded, legal but it was also not a patch on the sort of tax avoidance measures the Telegraph has repeatedly recommended to its readers.

Perhaps, then, Alexander’s mistake was not to be a signed-up reader of the Telegraph; after all, perish the thought that the newspaper is suggesting that there is anything wrong with its readers doing what it recommends to them.

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