Our new report: Richard Tice signed accounts wrongly claiming £98,000 of tax exemptions A 🧵 with the evidence:
Normal companies pay corporation tax. So, when they pay dividends, their corporate shareholders don't pay tax again. The dividends are exempt. REITs are different. They don't pay corporation tax. So dividends received by Tisun One, Two, Three, Four were not exempt.
Richard Tice applied for his Quidnet company to become a REIT. It then paid no tax. But the price was that the four "Tisun" companies holding shares in Quidnet REIT had to pay tax on their dividends. They didn't. (here's the accounts from one of them)
It was a really basic tax mistake. Everyone in REIT world knows that REIT corporate shareholders pay tax on their dividends - this isn't some deep tax nerd point. I'd expect Richard Tice to know it. I'd certainly expect his advisers to know it. It's a google search away.
Richard Tice had a different explanation for why no tax was paid when he spoke to the Sunday Times last month. Tice's statements here are all incorrect.
1. The companies weren't audited. 2. The accounts show the dividend exemption was claimed - wrongly. They don't show group losses being used. 3. And there were no losses in the group. First, the easy one: the accounts weren't audited. It says so on the front page.
Second, the accounts don't show what Tice claimed. This (T3, 2021) shows £60,906 of dividend income and says expected tax = £11,572, but cancelled by dividend exemption. Not losses. And **There is no dividend exemption for REIT distributions**
Maybe someone was being sloppy and typed "dividend income" when they really meant "dividend income is sheltered by losses". Nope. The code the accountants' software submitted to Companies House contains a specific dividend exemption tag More in this in our report.
The wrong use of the dividend exemption appears over all four companies for three years. The total untaxed income was £513,901. The corporation tax rate at the time was 19%, and so the unpaid tax was £97,641. Full workings/reconciliations in our report.
The accounts weren't audited. We don't know who prepared them, but Richard Tice signed them:
But maybe Tice is right now and the accounts were wrong in 2022? Maybe the Tisun companies were using group losses? Problem is: there were no group losses. Here's the group. The only companies that could have had losses for the Tisun companies to use were Tisun Holdco and Tisun Investments.
Tisun Holdco was a nothingburger. Can't have made losses.
Tisun Investments much busier. So maybe Tisun Investment had big tax losses it surrendered to the Tisun companies?
Nope. Because these were its assets: - £600k of unmortgaged residential real estate - a car on HP - £120k of unlisted investments - shareholdings in its subs - Loans to related parties - a loan to Reform UK None could generate material tax losses And its liabilities: - 270,000 preference shares at 7% (ignored for tax) - interest-free loans from related parties None could generate material tax losses (Way more detail on all this in our report; what the assets/liabilities were and why no tax losses could arise) So Tisun Investments Ltd did not generate material losses that could be used to shelter profits elsewhere in the group. (It looks like its accountants agreed, as there’s no sign of a deferred tax asset, or any mention of losses or group relief.) TL;DR The Tisun companies failed to pay tax on £514k of dividends. Richard Tice's claim this was because of losses is contradicted by - the accounts, which show a (wrong) use of dividend exemption - the fact there **were no material losses** So: £98k of corporation tax is due. Plus about £27k of interest This was a really basic mistake. Everyone in REIT world knows that REIT distributions are taxed - it's not some point only the tax nerds know That means HMRC are likely to assess penalties for carelessness We asked Richard Tice's lawyer for comment. We didn't receive a response (and neither did the Sunday Times).
Full details in our report, including how we come up with the numbers, and why we are so confident there were no losses in the group. 25 tax lawyers and accountants contributed - for which many thanks. buff.ly
buff.ly
We worked on this story with Gabriel Pogrund of The Sunday Times - his story is here: buff.ly
www.thetimes.com
Disclosure: I'm a member of the Labour Party. But everyone paying attention knows I call it as I see it. I've investigated Rayner, Starmer, Lavery, Zahawi. I've refuted accusations that Jeremy Hunt (twice), Rishi Sunak and Nigel Farage avoided tax. I annoy everyone.
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