Police in Denmark are considering a complaint about the financial affairs of Stephen Kinnock, the 40-year-old son of the former Labour leader. Mr Kinnock, who is married to the Danish Opposition leader, has been accused of avoiding tax by understating the amount of time he spent in the country.
He is already under investigation by the Danish authorities in relation to his earnings last year. However, the investigation could now be widened to cover the past five years. The scandal threatens to derail the career of Mr Kinnock’s wife, Helle Thorning-Schmidt, the leader of the Left-wing Social Democrats, who has called for higher taxes. Miss Thorning-Schmidt, who was poised to become prime minister, has returned early from holiday to fight the claims.
Mr Kinnock, a director of the World Economic Forum in Geneva, pays income tax on his £110,000 salary in Switzerland, where the rate is considerably lower than in Denmark. He told the Danish authorities that he spent no more than 33 weekends, from Friday to Monday, in Denmark each year. Residents are liable for income tax if they spend 180 days in the country, including arrival and departure days.
Mr Kinnock’s status allowed Miss Thorning-Schmidt to deduct about £40,000 in tax against mortgage repayments on their £500,000 Copenhagen town house. However, when she applied to make Mr Kinnock co-owner of the house, she said he was there “every weekend of the year”. Amid Denmark’s biggest political row in recent years, Miss Thorning-Schmidt has apologised for her “error”. Mr Kinnock insisted that his original declaration was correct but promptly paid an estimated £29,000 Danish tax bill for 2009, to avoid any “grey areas”.
However, as far back as 2007, Miss Thorning-Schmidt stated in a biography that Mr Kinnock “comes home every week, either Thursday afternoon or Friday” and returns to work on “Monday morning after the children are sent to school”. She repeated the comments in subsequent interviews. Mr Kinnock said in July last year that supermarket trips with his youngest daughter “every weekend” were renowned for their regularity. Søren Aagaard, a Danish tax lawyer, said: “I know the tax authority will be looking closely at these statements.” Frode Holm, an accountant for the couple, said they denied any wrongdoing. “There is no problem here,” he said. “Stephen was liable for tax in Switzerland. He did not break the Danish 180-day limit.”
The couple receive rental income from a flat they own in central London. It is thought that Miss Thorning-Schmidt pays Danish tax on her half of the income. But Mr Kinnock is assumed to have paid tax on his half in Britain, where tax was lower. Mr Aagaard said his income from the London flat could also be called into question.
From 2004 to 2008, Mr Kinnock worked for the British Council in Russia. Its overseas employees have their salaries reduced by the amount they would have been taxed in Britain, under the assumption that they are based here. But it is thought the Danish tax authority will examine whether Mr Kinnock’s domestic arrangements meant he was in fact liable for tax in Denmark. “If he was taxable and resident in Denmark from 2004 to 2008, he should have paid tax on it here and not in Britain,” Mr Aagaard said.
Mr Holm responded: “Stephen should not have been taxed in Denmark because he was in service with the British Council abroad.” A police spokesman said: “We received a complaint and are considering what action, if any, will be taken.” A spokesman for Miss Thorning-Schmidt did not respond to questions.
the Telegraph
Stephen and Helle Kinnock share a joke at the Danish taxpayers' expense
Mr Kinnock, a director of the World Economic Forum in Geneva, pays income tax on his £110,000 salary in Switzerland, where the rate is considerably lower than in Denmark. He told the Danish authorities that he spent no more than 33 weekends, from Friday to Monday, in Denmark each year. Residents are liable for income tax if they spend 180 days in the country, including arrival and departure days.
Mr Kinnock’s status allowed Miss Thorning-Schmidt to deduct about £40,000 in tax against mortgage repayments on their £500,000 Copenhagen town house. However, when she applied to make Mr Kinnock co-owner of the house, she said he was there “every weekend of the year”. Amid Denmark’s biggest political row in recent years, Miss Thorning-Schmidt has apologised for her “error”. Mr Kinnock insisted that his original declaration was correct but promptly paid an estimated £29,000 Danish tax bill for 2009, to avoid any “grey areas”.
However, as far back as 2007, Miss Thorning-Schmidt stated in a biography that Mr Kinnock “comes home every week, either Thursday afternoon or Friday” and returns to work on “Monday morning after the children are sent to school”. She repeated the comments in subsequent interviews. Mr Kinnock said in July last year that supermarket trips with his youngest daughter “every weekend” were renowned for their regularity. Søren Aagaard, a Danish tax lawyer, said: “I know the tax authority will be looking closely at these statements.” Frode Holm, an accountant for the couple, said they denied any wrongdoing. “There is no problem here,” he said. “Stephen was liable for tax in Switzerland. He did not break the Danish 180-day limit.”
The couple receive rental income from a flat they own in central London. It is thought that Miss Thorning-Schmidt pays Danish tax on her half of the income. But Mr Kinnock is assumed to have paid tax on his half in Britain, where tax was lower. Mr Aagaard said his income from the London flat could also be called into question.
From 2004 to 2008, Mr Kinnock worked for the British Council in Russia. Its overseas employees have their salaries reduced by the amount they would have been taxed in Britain, under the assumption that they are based here. But it is thought the Danish tax authority will examine whether Mr Kinnock’s domestic arrangements meant he was in fact liable for tax in Denmark. “If he was taxable and resident in Denmark from 2004 to 2008, he should have paid tax on it here and not in Britain,” Mr Aagaard said.
Mr Holm responded: “Stephen should not have been taxed in Denmark because he was in service with the British Council abroad.” A police spokesman said: “We received a complaint and are considering what action, if any, will be taken.” A spokesman for Miss Thorning-Schmidt did not respond to questions.
the Telegraph
