What can you really learn from looking at a politician's tax return?

http://www.guardian.co.uk/theguardian/shortcuts/2012/apr/11/what-learn-politician-tax-return

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Ken and Boris have stuck it out there, David Cameron is happy to do it, and several other senior cabinet members and their Labour counterparts are likely to join him. Is this rush for politicians to publish their personal tax returns a valuable piece of transparency or a pointless stunt?

We've discovered that Boris has paid around 45% tax on his £1.7m earnings over four years, Lib Dem mayoral candidate Brian Paddick gets a nice £63,397 police pension and Ken Livingstone has paid £113,861 in corporation and income tax on £342,041 of earnings over four years.

But the idea that these mayoral candidates have published their tax returns is a "complete farce" according to Richard Murphy, director of Tax Research UK.

The mayoral candidates' brief documents were in fact heavily edited highlights, a full tax return submitted to the Inland Revenue to calculate a self-employed person's tax bill usually runs to 15 pages. Complex arrangements are longer.

A full tax return may disclose all kinds of juicy details: tax allowances claimed, disability allowances, maintenance payments, detailed expenses, dependants, dividends and interest. Even then, "it is what's not on the tax return that really matters", says Murphy. People channel earnings offshore or through companies and trusts to dramatically reduce their tax bill. "You've got to be a pretty sophisticated reader of a tax return to even get the clues that somebody is avoiding tax."

Many details of partnerships, apart from the profit accrued from them, are not disclosed. A husband and wife may form a partnership to process income from, say, the rental of a house like the Camerons' Notting Hill home, currently a lucrative let for the prime minister.

Income from related companies is also not revealed on personal tax returns: Livingstone's published figures do not include his company, Silveta Limited, which held funds of £238,000 in 2011. His campaign has called for full "household" income disclosure for mayoral candidates.

In Norway, Finland and Sweden, ordinary citizen's finances are publicly accessible. At best, British politicians' very limited disclosures reveal the unsurprising news that Tories tend to earn more than Labour politicians. They may also show who has very complex tax affairs – and who concentrates on their political job.

Murphy is not convinced this move will help transparency or stop tax avoidance among the ruling elite. A better tax reform, he argues, would be to force multinationals and small limited companies to disclose far more about their financial arrangements than they do at present.