Danish politics rocked over Kinnock tax status By Thomas Buch-Andersen

Copenhagen Published duration 3 August 2010

image caption Mrs Thorning-Schmidt has led the Danish Social Democrats since April 2005

The leader of Denmark's main opposition party says she made a "big and sloppy error" by giving incorrect information to the Danish authorities about her husband, Stephen Kinnock.

Social Democrat leader Helle Thorning-Schmidt was speaking after the Danish tabloid newspaper BT had accused her husband of evading Danish taxes.

Mr Kinnock is the son of Lord Kinnock, the former UK Labour Party leader.

He works and pays tax in Switzerland on a reported income of £110,000.

Mrs Thorning-Schmidt admitted making a mistake over the amount of time her husband had spent in Denmark.

They have their family home in the Danish capital Copenhagen, even though Mr Kinnock works in Switzerland.

The Swiss federal tax rate is just 15%, whereas in Denmark, the most taxed country in the world, some Danes paid more than 63% income tax last year, according to the Organisation for Economic Co-operation and Development (OECD).

Mrs Thorning-Schmidt, who has campaigned for higher taxes for high earners, insists that her husband has resided in Denmark for only 33 weekends per year.

Therefore, she argues, he does not have to pay taxes in Denmark.

But when the couple applied for permission for Mr Kinnock to buy half of their shared home, Mrs Thorning-Schmidt wrote to the authorities that her husband spent "every weekend of the year from Friday through to Monday" in Denmark.

As a non-resident and UK citizen Mr Kinnock would not normally be allowed to buy a property in Denmark.

Political fallout

The conflicting information given to the authorities by Mrs Thorning-Schmidt, who has been for a while the favourite to win the next election, has been a blow to voters' trust in the opposition leader.

According to a poll in Berlingske Tidende, a leading Danish newspaper, 56% of voters do not believe that it was only a "sloppy error".

"We have had no benefits from the arrangement and from the error. If I really wanted to fiddle I would have done it much more elegantly," Mrs Thorning-Schmidt said at Copenhagen airport, after cutting short her family holiday to answer the criticism.

Political opponents have reported the misinformation given by the couple to the police, claiming it is a criminal act. The police are now looking into the allegations.

The dramatic fall in trust in the opposition's candidate for prime minister has sparked speculation that the liberal Prime Minister, Lars Loekke Rasmussen, might call a snap early election.

Mrs Thorning-Schmidt has agreed to have her family finances examined by Denmark's tax inspectors in an attempt to clear their name. She has also said that Mr Kinnock will now pay taxes in Denmark for the year 2009, even if he is not legally obliged to do so.