Accounts from the Electoral Commission and internal communications within the Conservative Party seen by PoliticsUK reveal that the Fareham and Waterlooville Conservative Association has failed to pay corporation tax on its rental income for at least the past 16 years.
The Association, known as the Fareham Conservative Association prior to the 2023 Parliamentary constituency boundary changes, is understood to earn income on renting a property to its Conservative Member of Parliament, Suella Braverman.
Braverman pays her local Conservative Party, which has also rented to previous MPs, for the office space using taxpayer funds claimed as Parliamentary expenses.
The claims for the rent, which follow the Independent Parliamentary Standard’s Authority’s rules, total over £49,000 since her election to Parliament in 2015.
Unincorporated Associations, such as local Conservative Associations, must pay corporation tax on profits, if they make any.
Despite this, party accounts submitted to the Electoral Commission going as far back as 2009 show that the Association has not paid any taxation on this income, despite making profits in a number of years.
In an email to Conservative Campaign Headquarters, seen by PoliticsUK, Association Chairman and chartered accountant Tom Davies acknowledged the error, stating that: “Our association has rented out an office to our MP for 20+ years and has always worked on the belief that it is not taxable income… we now know that assumption was incorrect.”
He also noted that the Association was completely unregistered for corporation tax with HMRC and sought guidance from CCHQ on whether the bill could be split with the neighbouring Hamble Valley Conservative Association, which inherited nearly half of the former Fareham constituency when the Parliamentary boundaries were changed in 2023.
Since 2009 the Association has made £32,815 in profit-making years. As a result, the unpaid corporation tax bill on those years would add up £6,235. This figure does not account for the financial years before 2009, for which accounts are not publicly available.
Further emails seen by PoliticsUK express concern that the total figure, including years before 2009, could be as high as £23,762.
The property, rented by Braverman for £460 per month, comprises of a small office space inside a larger building owned and operated by the Fareham and Waterlooville Conservative Association.
The Association is understood to have only learned of this potential liability within the last couple of months.
A regional official for the Conservative Party told PoliticsUK: “It’s an embarrassment that the Chairman of one of our principal Associations; someone who served as Suella Braverman’s election agent, and a self-described ‘tax accountancy expert’, couldn’t spot such a basic error.”
A spokesman for the Conservative Party said: “Corporation tax is paid on taxable profits, not turnover or the figure received in rent. Our central party guidance to local associations makes clear that some income may be liable to corporation tax.
“How much local constituency associations need to pay will depend on the circumstances of the case. Such qualifications may not be obvious from the association’s local accounts which are prepared for party members.”
Author: Max Booth & Theo Griffiths
Featured image via UK Home Office
