The TPA was founded in 2004 by "a group of "libertarian" Conservatives, frustrated by what they saw as the party's decision to ditch its traditional tax cutting message." At the time the Conservative Party felt the need to match the Labour Party's spending plans, and the TPA aimed to represent, in the words of founder and Chief Executive Matthew Elliott, those "who want to have lower taxes and lower spending". The attraction for donors, many associated with the Conservatives, is the ability of the TPA "to "fly kites" for policy ideas that may go on to be adopted as Conservative policy."
The TPA's campaigning approach focussed on the media, relying in part on the reduction in journalists' investigation budgets. It aims to shape public opinion through the media by packaging its research "into brief, media-friendly research papers, complete with an eye-catching headline figure to give reporters a ready-made "top line"." Its research is often based on "using the government's own data and Freedom of Information requests to winkle out examples of public sector waste".
The TPA's income from donations rose from around £68,000 in 2005 to around £1m in 2009.
In September 2010, it was reported that the TaxPayers' Alliance was organising an event sponsored by several American lobbyists and groups involved in the Tea Party movement, including the Americans for Prosperity Foundation, the Cato Institute and the Heritage Foundation. The Alliance has also sought advice from the Tea Party leadership, with Matthew Elliott stating in September 2010: "We need to learn from our European colleagues and the Tea Party movement in the US. It will be fascinating to see whether it will transfer to the UK. Will there be the same sort of uprising?"
In 2009, the TaxPayers' Alliance was mentioned 29 times by The Guardian, was quoted in 517 Daily Mail articles, 317 times in The Sun – including once by a shirtless model on Page Three.
The TaxPayers' Alliance is not officially affiliated with any political party. It has been accused of being a Conservative Party "front" by Labour MP Jon Cruddas. Polly Toynbee in The Guardian and Kevin Maguire in The Daily Mirror have also levelled this charge, although the group's leadership has denied it.
When Nick Ferrari asked TPA's campaign manager Susie Squire whether she was "secretly Conservative", she rejected the accusation as "outrageous" saying the organisation was "totally independent". In 2010, Squire became a special adviser to the Conservative Secretary of State for Work and Pensions, Iain Duncan Smith, before going on to become head of press for the Conservative party. Squire subsequently worked as David Cameron's press secretary in 10 Downing Street.
The Taxpayers' Alliance is constituted as a private company limited by guarantee in the UK - number 04873888. As a small company, it is exempt from audit which means that it meets two of the following criteria:annual turnover of £6.5 million or less
balance sheet total of £3.26 million or less
fewer than 50 employees.
The alliance has two offices – one in London and one in Birmingham. Its website shows that, in March 2009, it employed 13 members of staff.
Sixty per cent of donations come from individuals or groups giving more than £5,000. The Midlands Industrial Council, which has donated £1.5m to the Conservatives since 2003, said it has given around £80,000 on behalf of 32 owners of private companies. David Alberto, co-owner of serviced office company Avanta, has donated a suite in Westminster worth £100,000 a year, because he opposes the level of tax on businesses.
Construction magnate Malcolm McAlpine and a spokesman for JCB tycoon Sir Anthony Bamford, have said they also helped fund the TPA.
The TPA does not release details of income or donors, and as such has been rated by the Who Funds You? project as a less transparent organisation than some other UK think tanks.
The group has been accused of hypocrisy and possible illegality after it was revealed that it had been claiming tax relief on donations received from wealthy backers, which were intended for the purposes of political research.
The Alliance has called for more accountability and transparency in Parliament. In the aftermath of the Derek Conway scandal over the misuse of funding for political researchers, the TPA has called for greatly increased transparency, improved scrutiny of expenses and the abolition of some expenses such as the allowance for MPs' second homes. The Alliance has also written to the Parliamentary Standards Commissioner to request an investigation into the expenses of Michael Martin, the then Speaker of the House of Commons. They have not, however, argued for commensurate levels of accountability from pressure groups that receive commercial funding, and critics have argued that they are in favour of transparency only from people who are elected, as opposed to transparency for organisations that conduct political campaigning for commercial ends.
In October 2009 Elliott admitted that an unpaid non-executive director of the group, Alexander Heath, had not paid any British taxes for several years as he resides in the Loire, France. Heath has lived and paid taxes in France since 1973.
The charitable arm of the Taxpayers' Alliance — the Politics and Economics Research Trust — is under investigation by regulators following allegations that the group may have used the trust to gain tax relief for donations intended to fund political research.
Revelations by The Guardian newspaper in 2009 resulted in the UK's Charity Commission opening a regulatory compliance case into the Trust. It was reported in December of the same year that the alliance requested certain of its donors — identified as "private businessman" located in the English Midlands - to channel funds through the trust for research into policies which might potentially damage their commercial interests. This move allegedly allowed the Alliance to receive tax relief on the donations; tax accountants have stated that the move potentially breached charity law, as UK commission guidelines state that organisations may not be charitable if they have political purposes.
A spokesman for the Charity Commission was quoted as saying that the "scope of the investigation is to address the allegations relating to the charity's relationship with the Taxpayers' Alliance"; such cases are opened when "available information indicates misconduct or mismanagement has occurred" or otherwise when actions "may have been improper".
John Prescott, former UK Deputy Prime Minister, stated that the Charity Commission's announcement of an investigation showed the Taxpayers' Alliance was "exploiting the taxpayer rather than protecting their interests as they claim to do". He also wrote to Dame Suzi Leather, the Commission's chairwoman, requesting that the Alliance's charitable status be immediately suspended; he has in the past called the Alliance "a Conservative Party front".
According to another report, Americans for Prosperity, another Tea Party group which claims to have 1.5m activists and is headed by oil billionaires, Koch brothers of Koch Industries, was also represented at the London conference, and helped fund it.
An investigation by Tim Horton, research director of the left-wing Fabian Society, claimed the group is "fundamental to the Conservatives' political strategy", which he said was to destroy public confidence in politicians' ability to deliver public services, thereby paving the way for cuts. "There is something deeply dishonest about their campaigns on government waste," he said. "Their aim isn't to make public spending work better, but to slash it dramatically. Yet none of them will campaign on their true vision of society: fewer public services. At least Thatcher was honest about the deal: less 'public' means you go private."
An alternative organisation, The Other TaxPayers' Alliance, was set up in 2008 and claims to represent the 99.96% of the UK population who are not a member of the regular TPA. It campaigns for "fairer taxes, not lower taxes".
Columnist and media critic Owen Jones criticised the Taxpayers' Alliance in his 2014 book The Establishment: And how they get away with it for posing as a non-partisan grassroots group of concerned citizens, rather than a group that represents right-wing politicians, saying, "The TaxPayers' Alliance is a right-wing organization, funded by conservative businesspeople and staffed with free-market ideologues. And yet it presents itself as though it were simply the voice of the taxpayer. After all, 'alliance' itself implies some sort of broad coalition. From its early days, the Alliance's pronouncements were invoked by news outlets more or less as the impartial mouthpiece of the hardworking taxpayer."