Conservative chairman in row over news his company Jayroma made large donations to party but paid no corporation tax
The Tory party chairman Lord Feldman faces fresh scrutiny after it has emerged that his company has given tens of thousands of pounds to the Conservatives in the last two years while at the same time paying no corporation tax.
Feldman was drawn into controversy last month when he was forced to deny calling grassroots Tory activists “swivel-eyed loons”.
Accounts for the clothing company Jayroma, of which Feldman is controlling party, show that it made profits of £545,383 last year and £320,343 the year before. In neither year did it pay corporation tax. However, it has continued to be a generous supporter of the Tory party. Jayroma’s accounts show that it donated £8,690 to the Tories last year and £13,000 in 2011. Jayroma was legitimately exempted from paying corporation tax over the last two years because it made a loss of £1.7m in 2010, due in part to costs associated with the closure of a factory and redundancy payments to staff.
A Conservative party spokesman said: “Jayroma (London) Ltd made significant tax losses in 2010 and these losses have been correctly and legitimately offset against the profits generated in 2011 and 2012. All corporation tax returns have been properly filed for these years with HMRC.”
Despite making a loss in 2010 the company still gave the Tories £17,200, according to its accounts. And the previous year it gave £30,000 for the 18 month period up to the end of 2009. It donated £8,500 to the party in 2008. Carrying losses forward to offset against future profits is a legitimate accounting practice that helps companies smooth out the economic cycle.
However it has come under scrutiny as the debate about tax has been transformed into a major political issue.
In December Starbucks pledged to stop carrying forward tax losses amid concerns that it was not paying its fair share of tax in the UK. And Barclays has also come under close attention for its legitimate use of billions of pounds in tax losses.
Jayroma’s accounts explain that 2010 was a “difficult year” amid testing economic conditions.
The company was forced to restructure by closing some of its operations, a move that led it to return to profit in 2011.