The Scottish National Party (SNP) has initiated discussions with His Majesty's Revenue and Customs (HMRC) concerning the potential illegal reclaiming of Value Added Tax (VAT) on purchases made by former chief executive Peter Murrell during his embezzlement of over £400,000, First Minister John Swinney has disclosed.
Speaking at Holyrood, Mr Swinney confirmed that the party has "opened up discussions" with the tax authority regarding the matter. This development follows concerns raised by Scottish Labour leader Anas Sarwar, who questioned whether the SNP had improperly reclaimed VAT on items such as a £124,000 motorhome, which was recorded as a van in paperwork.
The First Minister acknowledged that he was unaware of the exact amount the SNP might owe HMRC. However, Mr Sarwar pressed the issue during First Minister's Questions, stating: "There could potentially be illegal reclaiming of VAT from HMRC, meaning potential misuse of public money that should not have been claimed because of the fraudulent receipts issued by Peter Murrell."
Mr Sarwar explained that political parties can reclaim VAT on purchases related to operating costs, but some of Murrell's fraudulent purchases "may have been included in any reclaimed VAT." The court heard that Murrell used fake invoices, expenses, and party charge cards to acquire numerous items, including two cars, expensive watches, pens, and a £23.98 egg poacher set.
Highlighting specific examples, Mr Sarwar said: "The £124,000 campervan recorded in the system as a van would be subject to 20% VAT. The £3,000 robotic lawnmower, recorded as legal fees, would be subject to VAT, or the ridiculous luxury egg poacher, recorded as an ethernet cable, would be subject to VAT. All potentially illegally reclaimed from HMRC."
In response, Mr Swinney stated: "The issues in relation to the implications of Peter Murrell's admission of guilt about the embezzlement of Scottish National Party funds does have potential implications in relation to the payment of taxation." He emphasised that the party had proactively raised these issues with HMRC in light of the criminal conviction.
The First Minister also confirmed that the SNP has instructed its lawyers to pursue legal action to recover the money Murrell "stolen" from the party. This move was unanimously agreed upon at a meeting of the party's ruling national executive committee on Wednesday night. Mr Swinney remarked: "We agreed unanimously to act to secure the party's interests by instructing our solicitors to begin action in court to recover the money that has been stolen from us."
Despite calls from Mr Sarwar for a Holyrood inquiry into the matter, Mr Swinney dismissed the proposal, arguing that the police investigation, which led to Murrell's conviction, was sufficient. He stated: "We've had a police investigation, there can be no higher investigation and more forensic investigation than a police investigation and I therefore do not support the establishment of a parliamentary inquiry, because we have had an investigation and it convicted somebody for embezzling from my party's funds."
