Richard Tice’s Property Firm Defaults on £120,000 Tax Payment

Richard Tice, the deputy leader of Reform UK, oversees Quidnet REIT Limited, a property firm under scrutiny for failing to notify tax payments. Specifically, Quidnet must have withheld around £120,000 from dividends and paid it to HM Revenue and Customs (HMRC), a requirement they allegedly overlooked.

Tax Default by Quidnet REIT

Quidnet REIT Limited paid approximately £600,000 in dividends from 2020 to 2022 to Richard Tice and his offshore trust, the RJS Tice Family Settlement. Rather than meeting their obligation to withhold tax, Quidnet’s accounts reveal no evidence of this payment to HMRC.

The matter was initially reported by Gabriel Pogrund from The Sunday Times. It has been found that the company did not comply with tax obligations concerning the dividends distributed during its tenure as a REIT (Real Estate Investment Trust), which lasted until August 9, 2021.

REIT Compliance Issues

Typically, REITs in the UK must distribute at least 90% of their tax-exempt rental profits as “Property Income Distributions” (PIDs). These distributions require a withholding tax of 20% for non-exempt shareholders. Failure to adhere to these legal obligations places significant liability on the company.

• Dividend Payments: Quidnet issued multiple dividends over the years, totaling almost £600,000.
• Tax Owed: The estimated unpaid income tax from these dividends is around £120,000.

Despite Quidnet failing to withhold and remit the necessary taxes, Tice argues that he has paid income tax on dividends received, which does not exempt the company from its legal obligations.

Analysis of Dividend Payments

Breaking down the dividends paid reveals clear discrepancies regarding withholding tax:

• FY2019 Final: £237,000 paid, with £47,400 of tax unaccounted for.
• H1 2020 Interim: £100,000 paid, yielding a £20,000 tax deficiency.
• FY2020 Final: £119,000 paid, resulting in £24,000 of unpaid tax.
• H1 FY2021: £116,000 paid, equating to a £23,000 tax shortfall.
• FY2021 Final: Approximately £24,000 paid, suggesting a £4,800 tax lapse.

The total estimated unpaid tax amounts to £119,200.

Consequences of Non-Compliance

HMRC possesses the authority to assess and collect the owed tax, including potential penalties and interest. Tice’s company appears to face a straightforward obligation to rectify this tax oversight.

The tax withholding failure is not classified as tax evasion or avoidance; rather, it’s seen as a simple oversight by Quidnet REIT. Nevertheless, significant scrutiny remains on Richard Tice and his management of Quidnet’s tax compliance.

As of now, Tice continues to maintain that all taxes owed on his dividends have been duly settled, despite the legal discrepancies surrounding Quidnet’s actions.