Vince Cable, the Business Secretary, has been embarrassed after being fined £500 by HM Revenue and Customs for failing to pay VAT on his extra-curricular earnings.
The Liberal Democrat cabinet minister, who has been outspoken in the past about "ugly" tax avoidance, failed to register his earnings from media work, according to the Times.
His unpaid VAT, it was claimed last night in the Sun newspaper, could have been as much as £25,000.
A spokesperson for the minister said Cable's tax affairs were "above board" adding that HMRC had "let him off 50 per cent of the usual penalty".
His earnings from media work, including television appearances and newspaper columns, and from after-dinner speaking arrangements, soared in the two years before the Liberal Democrats entered a coalition with the Conservatives in 2010.
Cable was hailed as the sage of the credit crunch and became a popular figure through a combination of dry wit and economic nous. He appeared on Strictly Come Dancing's Christmas special last year but donated his fee to charity.
Before and after being appointed Business Secretary, Cable railed against tax avoidance saying in one 2009 speech that systematic tax avoidance "strikes a particularly ugly note in these straitened times."
He also said in an interview that "two things cause offence: one is reward without merit, the other is tax dodging. We have plenty of both."
Cable's aides said the VAT error had been discovered by his personal accountants in January while his tax return for the previous year was being finalised.
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