AN arrangement between HM Revenue and Customers (HMRC) and the British Venture Capital Association (BVCA) means that profits made at investment firms, called ‘carried interest’, are treated as personal investments.

This means the profits are taxed at a 28 per cent rate, and in some cases 10 per cent, rather than the usual 40 per cent or 45 per cent.

Private equity fund managers can earn between £1.2 million to £15 million in a “good year”, yet avoid paying national insurance contributions and pay a lower tax rate than those on incomes far below theirs.

Sixteen private equity bosses are major donors of the Conservative Party, giving more than £7 million over the last seven years. More than one in six of the Conservative donors who have attended David Cameron's 'donor dinners' in 2014 were private equity bosses.

George Osborne didn't close the Mayfair loophole in the budget, so now it's up to our future politicians, whatever their parties, to commit to taking action to close this loophole if they are elected so that this abuse, estimated to cost the revenue £700 million per year, can be stopped and hard working families be given some relief from the financial burdens imposed on them

David Kennett

Cwm Talwg

Barry