Cable book boost 'led to tax error'
Business Secretary Vince Cable has blamed the surprise success of his best-selling book on the recession for his "embarrassing" failure to pay a tax bill on time.
Mr Cable was hit with a £500 penalty from HM Revenue and Customs (HMRC) after the blunder over a VAT bill of up to £15,000 on his media work.
The Business Secretary - who has criticised firms which seek to avoid tax - admitted it was a "bit embarrassing" that his VAT liability "wasn't spotted earlier". But he insisted that he "made no attempt to avoid tax" and the "oversight" had happened in good faith.
Downing Street said it regarded the incident as "closed", adding that Mr Cable retained the Prime Minister's full confidence.
Mr Cable's tangle with the tax authorities occurred before he became a minister, when he earned an estimated £192,000 on top of his MP's annual salary of £65,738 in 2009/10.
HMRC rules state that if a person's turnover of VAT-liable goods and services over a 12-month period exceeds £73,000, they must register for the duty within 30 days.
Mr Cable said that his income was unexpectedly boosted above this threshold thanks to the popularity of his book The Storm: The World Economic Crisis And What It Means.
Speaking at an event hosted by think tank Policy Exchange in Westminster after the fiasco was revealed, he admitted he "wouldn't offer any advice" to businesses on tax. But he added: "All my income is fully declared, all taxes fully paid. There was an issue that arose on the back of my recent best-seller where I went through the tax threshold and didn't immediately notify it."
Mr Cable said that he approached HMRC unprompted, as soon as he realised he was liable for VAT on his earnings for 2009/10. "The tax was paid in full and the matter closed within four weeks," he said.
"HMRC waived 50% of the fixed penalty for late notification in recognition of the fact that I did approach them unprompted and my oversight was in good faith. I made no attempt to avoid tax - in fact I made every effort to pay what was outstanding as soon as it became clear I was liable for VAT. It's a bit embarrassing that this wasn't spotted earlier. None of this will stop me talking out against tax avoidance."