Reform UK deputy Tice faces tax law violation allegations

Richard Tice, the deputy leader of Reform UK, is facing demands to urgently explain himself over allegations his company broke the law by failing to pay more than £90,000 in tax. According to multiple reports, Tice's firm Quidnet REIT Ltd allegedly failed to hold back tax before paying shareholders on at least three occasions between 2020 and 2021, leading to a tax shortfall of around £91,200. Tax expert Dan Neidle stated that Quidnet mistakenly failed to pay the tax required by law and is now required to pay it. The Sunday Times reported that Tice received at least £91,000 because his property investment company did not pay the required 20% tax on dividends before they were issued to him and his offshore trust.

Tice owns the property company Quidnet REIT Limited, which from 2020 to 2022 paid around £600,000 of dividends to him and his offshore trust. The company was required by law to withhold approximately £120,000 of tax from those dividends and pay it to HMRC. Analysis of company accounts and public filings indicates that Quidnet REIT Limited did not pay the required tax on the dividends. The issue was first identified by Gabriel Pogrund of The Sunday Times, and Quidnet was a Real Estate Investment Trust (REIT) from 10 September 2018 to 9 August 2021.

Specific allegations center on Quidnet's failure to pay tax on dividends, with The Sunday Times reporting that Tice ran four shell companies which did not pay any tax on profits between 2020 and 2022. According to the newspaper, Tice channelled dividends into structures including an offshore trust and a string of dormant businesses, which reduced his exposure to tax. The REIT status gives firms a grace period in which they are exempt from corporation tax, and instead issue a portion of earnings to shareholders who are taxed individually. The Sunday Times claimed Quidnet did not pass the technical tests for REIT status at the time and never did, and had gained the status through a legal quirk.

Political reactions have been swift, with Labour urging HMRC to investigate Richard Tice's tax arrangements. In response, Reform UK said the reported failure of Tice's company to pay tens of thousands of pounds in tax on dividends was a minor administrative error. Party chair Anna Turley wrote to HMRC after The Sunday Times reported Tice had avoided nearly £600,000 in corporation tax through his property company. According to Turley, the article presented a deeply troubling case which needs to be investigated with the utmost urgency.

At a press conference, Nigel Farage lashed out at a reporter and challenged her to give him a lecture on tax law when asked about Richard Tice's tax affairs. This confrontation highlighted the political sensitivity of the allegations. Tice himself has been vocal in his defense, stating at the same event that he is always happy to put things right and will pay what is owed if numbers need rechecking. He added that his firm Quidnet Reit Ltd was a UK company paying UK tax in accordance with UK laws.

Broader tax allegations involve questions about shell companies and REIT status. REITs are usually required to be widely held by different investors, but Quidnet never attracted more than a small number of outside investors, according to research sources. This raises questions about the legitimacy of its REIT designation. The Sunday Times reported that Tice's use of an offshore trust and dormant businesses formed part of tax minimization structures. Tice has argued that people should pay as little tax as possible within the legal limit, stating that the idea that morally, we have got to pay the maximum tax we possibly can - therein lies the road to ruin for the UK as an economy.

The complexities of REIT status include a grace period for corporation tax exemption, but allegations suggest Quidnet may have improperly held this designation. The exact legal status and compliance of Quidnet REIT Limited's REIT designation during its operation remains unclear. If the company did not meet the technical requirements, its tax arrangements could face further scrutiny. The total amount of tax Richard Tice or his companies owe is also uncertain, given conflicting reports on different tax types.

Contradictions exist in the reported tax amounts, with some sources alleging a £90,000+ dividend tax shortfall while others claim £600,000 in corporation tax avoidance. This discrepancy reflects different aspects of the tax allegations, with one focusing on dividend tax non-payment and another on corporation tax avoidance through REIT status. The characterization of the issue is disputed, with Reform UK calling it a minor administrative error and critics alleging broader tax minimization schemes. Whether HMRC will investigate these matters is not yet known.

Tice has made counter-accusations against Labour, alleging that the Labour Party failed to pay tax on the revenue of its own property company, Labour Party Properties Limited. In an open letter to Anna Turley, Tice said Labour Party Properties Ltd appears that no corporation tax has been paid during this period and had received over £30m in rental income. According to Companies House filings, Labour Party Properties Ltd is a company that buys, sells and lets its own or leased real estate, where its accounts are six months overdue. The accuracy of Tice's allegations about Labour Party Properties Ltd not paying corporation tax since 2000 has not been confirmed.

Additional political context shows that the average council tax increase in Reform's nine majority-run councils this year is 3.94%, compared to 4.71% for Labour, 5.49% for Liberal Democrats, and 4.9% for Conservatives, according to multiple reports. Tice has highlighted this performance, stating that Reform councils have delivered more than £700 million in savings and imposed lower council tax increases than other parties. This data forms part of Reform UK's broader narrative on fiscal responsibility.

Formal complaints have been lodged, with Labour's Anna Turley writing to HMRC about Tice's tax arrangements after The Sunday Times report. The outcome of any potential investigations or legal actions regarding the tax allegations against Richard Tice remains to be seen. Tice has dismissed the newspaper investigation over his own tax affairs as a smear, and he has refused to answer directly about the tax payment, instead stating he paid income tax on the dividends. He argued that few people would voluntarily choose to pay more tax than they are legally obliged to do.

Key unknowns include whether HMRC has launched or will launch an investigation into Richard Tice's tax affairs, and the legal status of Quidnet's REIT designation. The total tax owed is unclear due to conflicting reports, and it is not known if Tice's allegations against Labour are accurate. The potential outcomes of investigations could have significant implications for all parties involved.

The implications of these allegations extend to political fallout for Reform UK, potential legal consequences for Tice and his companies, and impact on tax policy debates in the UK. Tice's stance that all Britons should do their best to pay the minimum tax possible contrasts with calls for stricter enforcement. He noted there was no obligation to pay the maximum tax required and suggested few people would likely take such a decision. As these developments unfold, they may influence public perception and electoral dynamics ahead of future political contests.