By Nicholas Watt Chief political correspondent From The Guardian UK

Labour leader says he has paid more tax than companies known to PM’s friends in reference to George Osborne’s father’s firm

Jeremy Corbyn has mocked David Cameron by saying that he has paid more tax than companies well known to friends of the prime minister – an apparent reference to the wallpaper firm established by the chancellor’s father.

The Labour leader said that the tax highlighted on his tax return, which showed he declared an extra £1,350 in earnings on top of his parliamentary salary, was higher than “some companies owned by people that he might know quite well”.

George Osborne’s tax return revealed that he was paid £44,647 in dividends from shares in his father’s company, Osborne & Little. The company has paid no corporation tax since 2008 after rolling over losses from previous years.

In the first session of prime minister’s questions since the publication of details from the leaked Panama Papers in the UK by the Guardian and the BBC, Corbyn criticised the government for failing to live up to its rhetoric on tax havens. The Labour leader highlighted remarks by Alden McLaughlin, the premier of the Cayman Islands, who has said that a register of beneficial ownership will remain private.

Corbyn began the session by criticising the government for allowing HM Revenue & Customs (HMRC) to cut staff by 20% while it estimates the UK suffers from a £34bn tax gap. This is the gap between the amount of owed to HMRC and the amount collected.

The prime minister replied by mocking Corbyn for his handwritten tax return, which was filed late, incurring a £100 fine. It subsequently turned out that Corbyn had over-declared by £270.

Cameron said: “I’m glad he wants to get onto our responsibilities to pay our taxes. That’s very important. His tax return was a metaphor for Labour policy: it was late, it was chaotic, it was inaccurate and it was uncosted.”

The prime minister added that the government had closed loopholes worth £12bn in extra tax revenue in the last parliament and aims to generate a further £16bn in the current parliament.

Corbyn thanked the prime minister for highlighting his “warts and all” tax return as he then mocked the chancellor for benefiting from his father’s firm. He said: “I am grateful to the prime minister for drawing attention to my own tax return. There, warts and all – the warts being my handwriting, ‘all’ being my generous donation to HMRC. I actually paid more tax than some companies owned by people that he might know quite well.”

The Labour leader accused the government of failing to match rhetoric on tackling tax avoidance with action as he highlighted the actions of the premier of the Cayman Islands. Jude Scott, the chief executive of Cayman Finance, said a new agreement with the UK on beneficial ownership would mean “business as usual for Cayman”.

Corbyn said: “The prime minister does talk very tough and I grant him that. The only problem is it is not a public register that he is offering us. He is only offering us a private register that some people can see.

“It is quite interesting that the premier of the Cayman Islands, Alden McLaughlin, is today apparently celebrating his victory over the prime minister. He is saying that the information certainly will not be available publicly or available directly by any UK or non-Cayman-Islands agency.

“The prime minister is supposed to be chasing down tax evasion and tax avoidance. He is supposed to be bringing it all into the open. If he cannot even persuade the premier of the Cayman Islands or Jersey to open up their books, where is the tough talk bringing the information we need to collect the taxes that should pay for the services that people need?”

The prime minister told Corbyn: “He is misunderstanding what I have said. In terms of the UK it is an absolute first in terms of a register of a beneficial ownership that is public. The British one will be public. Further to that we are also saying to foreign companies that have dealings with Britain that they have to declare their properties and the properties they own which will remove a huge veil of secrecy over the ownership, for instance, of London property. I am not saying we have completed all this work.

“But we’ve got more tax information exchange, more registers of beneficial ownership, more chasing down tax evasion and avoidance, more money recovered from businesses and individuals. All of these things are things that have happened under this government. The truth is he is running to catch up because Labour did nothing in 13 years.”

IMAGE: David Cameron and Jeremy Corbyn clash over tax at prime minister’s questions – video screen shot

For more on this story and video go to: http://www.theguardian.com/politics/2016/apr/13/jeremy-corbyn-david-cameron-tax