The deputy leader of Reform UK, Richard Tice, owns a property company - Quidnet REIT. From 2020 to 2022 it paid Tice…

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Summary

Reform UK deputy leader Richard Tice's property company Quidnet REIT failed to withhold approximately £120,000 in required income tax from roughly £600,000 in dividends paid to Tice and his offshore trust between 2020-2022, according to analysis of company filings. While not criminal tax evasion, the company appears to have mistakenly failed to comply with legal requirements for REITs to withhold 20% tax on dividends.

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#1
The deputy leader of Reform UK, Richard Tice, owns a property company - Quidnet REIT. From 2020 to 2022 it paid Tice and his trust £600k in dividends. Quidnet should have paid £120k of tax on those dividends. It didn't. A 🧵 with evidence from the company's own filings:
#2
From 10 August 2018 to 9 August 2021. Quidnet was a REIT: an investment fund that invests in real estate. Just as an employer is required to withhold PAYE tax from wages, a REIT is required to withhold 20% income tax (20%) from its dividends, and pay it to HMRC.
#3
Combining stock exchange announcements and Companies House reporting shows that Quidnet paid around £600,000 in REIT dividends to Mr Tice and his offshore trust. (methodology in the report, linked below)
#4
Quidnet should have withheld around £120,000 of income tax from those dividends, and paid it to HMRC. There is, however, no sign of this in the company's accounts:
#5
And most of the dividends were scrip dividends/satisfied by issuing shares. We can track through share ownership and show that no was was withheld from these dividends. (again, all of this is in our report)
#6
Here's our total - about £596,000 of dividends paid, £119,200 of tax should have been deducted - but wasn't.
#7
It’s important to add that this was not tax evasion – a criminal offence – because there’s no reason to believe Quidnet’s directors or employees acted dishonestly – in our view that would be far-fetched.
#8
It was also not tax avoidance – an attempt to exploit a loophole. It was much more simple than that: Quidnet mistakenly failed to pay the tax required by law, and is now required to pay it.
#9
These rules are well understood in the industry. The mistake may well have been "careless" - meaning penalties apply.
#10
We asked Mr Tice for comment. It would be nice if politicians responded to reports like this with something like: that looks interesting; I'll look into it, and thanks for bringing it to my attention. But instead we got the usual deflection:
#11
@Gabriel_Pogrund at The Sunday Times originally found this story. And he was more successful than us getting an explanation out of Mr Tice. It seems Mr Tice's view is that *he* paid income tax, so it doesn't matter that Quidnet didn't. That's not how it works.
#12
@Gabriel_Pogrund First we don't know how much tax Mr Tice and his offshore trust paid, and if overall HMRC received the "correct" amount of tax.
#13
@Gabriel_Pogrund But that's not the point. It would be awfully convenient if REITs didn't have to withhold tax from dividends, and their shareholders could just choose to pay tax later. That's not permitted.
#14
@Gabriel_Pogrund REITs and their investors don't get to choose how and when tax is paid. The law required that the REIT pay tax on its dividends immediately, rather than waiting up to 21 months until its shareholders file and pay tax. The tax is still due.
#15
@Gabriel_Pogrund Our full report is here: taxpolicy.org.uk/richard-tice-c…