Reform’s Richard Tice has been the subject of what I fear is intended as a hit-piece in the Sunday Times. “The Deputy Leader of Reform UK avoided nearly £600,000 in corporation tax after obtaining a rare legal status for his company,” it reports. “Richard Tice then channeled the company’s dividends into an offshore trust and a string of dormant businesses. Several did not pay any tax during the relevant period.” They say all this, I regret to have to report, as if it’s a bad thing.
Tice showed just the sort of entrepreneurial ambition we can hope for from a true Brexit believer
At issue is the status of a property company majority-owned and controlled by Mr Tice called Quidnet Reit Ltd, between 2018 and 2021. The company registered for a special status called a Retail Estate Investment Trust (Reit), which would allow the company to issue dividends to shareholders rather than paying corporation tax. This is a special status usually applying to much bigger companies – FTSE-listed, sovereign wealth funds and suchlike – but Mr Tice, evidently, was thinking big; and good on him. One of the conditions that a would-be Reit needs to meet is that it is “non-close”, i.e. isn’t controlled by one person or a group of associated entities. HMRC, however, allows a three-year “grace period” for fledgling Reits to organise themselves in such a way as they will comply with the rules.
Mr Tice, no question, faced an uphill struggle to get Quidnet “non-close”. At the time of registration, nearly a third of Quidnet’s shares were held by the R J Tice Family Sipp, another chunk was held by the R J Tice Family Settlement (a Jersey-registered trust), 17 per cent were owned directly by R J Tice, and another 21 per cent were shared between three now dormant companies created by R J Tice shortly before Quidnet took on its Reit status.
The Sunday Times report seems to intend to insinuate that Mr Tice benefited in tax-efficiency from that three-year probation period without having had realistic hopes of rendering the company “non-close” by attracting outside investors. Well, are we to punish entrepreneurial ambition? Are we to make windows into men’s hearts? Mr Tice says that he gave it the good old college try, and I see no reason not to believe him.
“We instructed advisors to seek extra investors and made presentations etc. [We] made good progress, just did not get quite close enough,” he told the paper. “Market moved against property companies and Covid made much harder.”
Just a month before the end of the grace period – when, I assume, with heavy heart, our hero at last accepted defeat – he deregistered the company’s Reit status and it returned to paying tax as normal. Tice said 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”. He only declines to share the prospectuses he sent to outside investors because they were “confidential”. That’s honourable: the easy thing to do would be to see off the Sunday Times’s innuendo by sharing the presentations publicly, but he has too much regard for the privacy of his associates to take the easy way out.
All of this gives me more, rather than less, reason to admire Reform’s senior leadership. Does it not offer a rebuke to so many of the stereotypes? Parochial, small-minded, Little-Englandish, they say of Reform and its attitudes. Yet it’s hard to say that, surely, of Mr Tice – a man who divides his time between London and Dubai and who is open-minded enough to bless Jersey and Guernsey with some of the companies through which his businesses are owned.
A boorish mistrust of “elite” expertise is also imputed to Reform’s populist agenda. Yet here is Mr Tice, quite properly, trusting to the advice of professionals in a complex area.When nosey-parkers ask why these three now-dormant companies (they’re called Tisun One, Tisun Two and Tisun Three: three blind Tice!) paid no tax on their dividends from Quidnet, he says: “The accountants advise on this and sign the audit and they are top drawer so I trust them.”
In short, therefore, our man showed just the sort of entrepreneurial ambition we can hope for from a true Brexit believer and an aspiring leader of men. He did not shrink from the challenge of seeking to bring his little property company into the same league as some of the biggest companies in the world, paddling his plucky little dinghy into the shipping lanes of the supertankers. Despite his best efforts, the seas were against him and so, in punctilious compliance with maritime law, he paddled back into harbour. There is no shame in that, and if the whole excursion had the accidental effect of saving him a few bob on his tax bill that is no more than fitting compensation for the disappointment. I hope readers will join me in saluting a true patriot. We need more like him.
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