Friday, July 31, 2009

Labour Donations Mask the Real Figures

It seems that the Labour Party have the same approach to their own balance sheet as Gordon Brown has to the nation's finances. The papers have reported this morning that in 2008 they raised more money than the Tories. Er, not so. They only got to the figure of £34 million by reshaping their balance sheet to make it look better than it really is. £4.6 million of the £34 million was a VAT rebate. A further £2 million was a loan converted into a donation by Lord Sainsbury. When you take into account the amount of money they receive from the unions, the figures don't look quite so healthy. Indeed, it seems J K Rowling was their biggest donor in 2008.


Mirtha Tidville said...

anybody who wastes a penny on the Liebour party needs certifying...

The Purpleline said...

There should be a law introduced that no political party can take office or be in official opposition, if they are bankrupt.

We all know Brown & Labour is morally bankrupt, can somebody in the Tory administration pass a law once in power to make parlimentarians financially responsible for their parties finances.

We need to bankrupt Brown personally for the damage he has done to this country, this is as good as it gets. I have a lamppost with his name ready.

Anonymous said...

You have to spend some serious money to warrant a £4.6m VAT rebate.

gustavus said...

Another good reason not to read her dreadful novels

Unsworth said...

Rowling always seems slightly ethereal to me - it's something about that fixed smile and dull, lifeless eyes. Like she's with us - but not of us. Perhaps her donations are a manifestation, or something.

Anyway, I wonder if she'll make a donation in 2009 - and if so, why? What is she hoping for from this bunch of Orcs and Snotlings?

Chris Paul said...

When is cash money not cash money? Er, never.

And are you talking "balance sheet" or "profit and loss" or something else? It's hard to tell.

What is wrong with money from 4 million workers as opposed to a handful of vulture capitalists? In this case from the many not the few. Good.

JK Rowling donation. Also good.

You say:

£4.6 million of the £34 million was a VAT rebate.

That's still cash income Iain. Did it not fully or partly (depending on cash flow) appear on the other side of the accounts too as outgoing item or within most of the items? Is anyone suggesting HMRC made a donation? Er, no.

Should these items NOT be in the P&L? Because that's probably what you're talking about isn't it? Not the Balance Sheet.

Whether it appears on either or in a turnover figure will surely depend on a particular organisation's accounting conventions or elections from time to time? And also any special circumstances - see below for possible explanation.

A further £2 million was a loan converted into a donation by Lord Sainsbury.

That seems an even sillier point. A loan of this size converted into a donation is a notable event. Substantially improving one's balance sheet. And such conversions are a feature of most parties' accounts from time to time.

It's certainly not any kind of grubby looking property deal anyway.

PS Back to the VAT income. Should one be largely getting income from subscriptions and donations and loans etc - exempt or zero rate - and spending mostly on print and advertising and professional fees and so on, perhaps on rents for VAT-opted properties - standard rate - then most of the income will have no VAT and much of the expenditure will be subject to VAT, so a big slice will come back.

There is also a one off EU ruling that brings some historic rebates this year, for one year only. Any one off income under this would certainly belong on the P&L and it wouldn't be right to treat it like other VAT if that was conventionally netted off. Could it be something to do with that?