Tax hard man Cable 'embarrassed' at VAT fine

Vince Cable today admitted it was "a bit embarrassing" to be fined £500 for failing to register on time for VAT.

The Business Secretary also wrote a cheque for £25,000 in unpaid VAT after his private earnings soared to £192,000 on the back of his media stardom as a pundit on the economic crisis.

Confessing he had been caught out by his own rules, Mr Cable said: "It's a bit embarrassing this wasn't spotted earlier. But none of this will stop me talking out against tax avoidance."

It was particularly humiliating for the Lib-Dem minister because he built his reputation by condemning rich tax dodgers. The Sun today taunted him with the headline Vince Avoids Tax.

Mr Cable denied suggestions he was caught out by VAT officials and insisted he had made an honest mistake. "I have not avoided paying tax," he said.

"I approached HMRC unprompted as soon as I realised I was liable for VAT on my earnings. The tax was paid in full and the matter closed within four weeks."

The row centres on his tax returns for 2009/10. Nine months ago his accountants realised he owed £25,000 in tax on his pre-election freelance earnings as an author, after-dinner speaker and high-earning newspaper columnist.

His part-time income soared from £50,998 in 2008/09 to between £127,291 and £154,289, according to declarations in the Commons register of interests, on top of his £65,000 MP's salary.

Because his income topped £73,000 he had to register for VAT within 30 days - but failed to do so until his accountants noticed the error.