Labour donor Lord Alli failed to declare interests in tax haven firm

A Labour peer embroiled in the party’s ongoing donations row did not declare that he is a director at a company based in a tax haven.

An investigation by openDemocracy found that Waheed Alli could be entitled to more than £425,000 from the firm.

His directorship at Mac (BVI) Limited, a firm based in the British Virgin Islands, was added to his register of interests only after he was contacted by openDemocracy last month to ask why it was missing.

Lord Alli’s donations to senior Labour figures have been the subject of intense scrutiny in recent weeks. This morning Keir Starmer told the BBC he accepted accommodation from Alli worth £20,000 when his son needed somewhere to study for his GCSEs.

Last month, it emerged that Alli paid for tens of thousands of pounds of clothing for the prime minister and his wife, as well as a 40th birthday party for education secretary Bridget Phillipson. The deputy prime minister, Angela Rayner, has also admitted staying in a New York flat owned by Alli last December, saying it was a “personal holiday”.

When openDemocracy reviewed Alli’s register of interests last month, we found he had declared a chairmanship of 450 PLC, an investment firm based offshore in Jersey. This role does not make the peer any money.

But we also found he had not declared that he had been a director of 450 PLC’s subsidiary firm, Mac (BVI) Limited, since April 2023.

When questioned about it, Alli said the omission was an “unintentional error”, adding: “I hadn’t realised until you asked that it wasn’t listed on my register of interests”.

He then added the directorship to his register as a “non-financial interest”.

But financial accounts say Alli holds so-called “incentive shares” in the firm.

The documents also note that while Alli does not receive any directorship fees at present, should an acquisition be completed while he is a director, he will receive “a one-off transaction fee of an amount equal to £25,000 per calendar month elapsed between the date of his appointment and a platform acquisition being completed”.

This means if an acquisition were made this month, Alli appears to be entitled to £425,000 in directorship fees as part of a long-term incentive arrangement.

Alli, who has given more than £700,000 to Labour over the past two decades, told openDemocracy: “The company has yet to make an acquisition. I don’t receive a fee and have no financial interest in the company until an acquisition is made.”

He added that both Mac (BVI) Limited and 450 PLC are currently loss-making, but will pay tax in the UK when they make a profit.

Mac (BVI) Limited is based in the British Virgin Islands, a tax haven that has been described as “a destination of choice for those with money to hide” by Transparency International.

Speaking in the Commons in July, Labour’s foreign secretary David Lammy pledged to tackle individuals and companies taking advantage of offshore tax havens “with full vigour”.

He added: “We were concerned that parts of the last government were turning a blind eye to these issues. I hope to come forward with further proposals in the coming weeks.”