Lib Dems want probe into Philip Green’s tax affairs

Liberal Democrat MPs have called for an investigation into the tax affairs of the coalition government's new efficiency advisor, Sir Philip Green, after their leader, deputy prime minister Nick Clegg, spoke out on the issue of tax avoidance.

Green - the owner of the Arcadia group, which includes the high street fashion chains TopShop and Dorothy Perkins - was appointed last week to head a review into how the government can cut public spending.

But at an event to promote the government's efforts to increase social mobility, the deputy prime minister said: "We are looking at the case for an anti-avoidance rule to ensure that wealthy individuals pay their fair share of tax."

The Liberal Democrats have been criticised from the left for signing up to their Conservative coalition partners' plans to tackle benefit fraud despite the far bigger problem of tax avoidance by the rich. Tax avoidance is not illegal, but the Lib Dems said in their election manifesto that they would "close loopholes that unfairly benefit the wealthy".

Lib Dem MPs have seen Clegg's words as an opportunity to raise the issue once more. Roger Williams, the Lib Dem MP for Brecon and Radnorshire, said that although Green was "very capable", HMRC should examine his tax affairs.

"We are very keen that artificial arrangements are minimised," he told the Guardian. "What it brings home to me and my constituents is that rich people can arrange their financial affairs with a great deal more latitude [than poorer people]."

At issue is the fact that Green's wife, Cristina, lives in the tax haven of Monaco. As she owns Arcadia, she is paid dividends from the company direct. These include a 2005 payment of £1.2bn, of which the UK Treasury saw nothing – an entirely legal tax arrangement. A British resident would have had to pay £285m on the dividend.

Read a full report at the Guardian. ·