The claims made in The Sunday Times were that Richard Tice, deputy leader of Reform UK, avoided nearly £600,000 in corporation tax by pursuing a listing as a real estate investment trust, listed on TISE.
Reits, as they are known, are a specialism of the local exchange, offering opportunities for investors from outside the UK to invest in UK property.
Between 2018 and 2021 Mr Tice had attempted to secure Reit status for his property company Quidnet Reit Ltd, a Mayfair-based firm with net assets of £33m. owning eight industrial estates in the UK, the largest of which is in Darlington.
The newspaper alleged that in doing so he avoided paying hundreds of thousands in corporation tax.
The company was listed on the local stock exchange and Mr Tice applied for it to become a real estate investment trust, a corporate structure whose complex rules are administered by HMRC.
At the time such Reits needed to be listed, an area where TISE and the London Stock Exchange dominate the sector. TISE has previously claimed to have 45% of all UK Reit listings and now apparently has the dominant market share.
The structures are designed to encourage people to invest in UK real estate in a simple and tax-efficient way. Firms which obtain the status do not pay corporation tax, instead issuing dividends to shareholders, who are then taxed individually. The rate at which shareholders are then taxed will in turn depend on where they are resident and their tax status in the UK.
Quidnet did not pass the technical tests for Reit status, but under HMRC rules was given three years to find investors to do so. Mr Tice told the Sunday Times that significant efforts were made.
The company paid no corporate tax for two years, the newspaper said.
Mr Tice was still personally liable to pay tax on dividends received.
The MP for Boston & Skegness has served as Nigel Farage’s candidate for deputy prime minister since the last general election, and is also Reform’s spokesman for business, trade and energy.
He said that he had complied with all relevant rules.
‘Voters should be reassured to have a successful businessman who knows how to make money for shareholders running a business, trade and energy department, making money and growth for taxpayers. If the country had had this before, maybe we would not be in the current dire economic pickle,’ he added.
The Sunday Times said that its story could prove ‘awkward’ for Reform, which has faced scrutiny over its tax policy. It had promised to cut taxes by £90 billion if elected, but now says this will not happen unless public spending is curbed. Several Reform-run local authorities have failed to cut, or even, increased council tax.
The newspaper said that as Reits were not a common structure generally used by large and publicly-listed investors, the tax authorities have not adopted an aggressive approach towards policing them.
But it said that recent guidance from HMRC had indicated that it was alive to the possibility of abuse.
Mr Tice, who incorporated the company in 2015, shortly after beginning his political career as founder of the Leave.EU campaign group, responded that Quidnet was a ‘UK company paying UK tax operating in accordance with UK laws’ and that it was ‘not unusual for property companies to seek Reit status’.
The International Stock Exchange was approached for comment.