This interactive chart lets you see the current rUK and Scottish marginal tax rates for 2023/24 and 2024/25, with/without child benefit and student loans. You can turn on/off different years and options by clicking on the legend below the chart. Some of these charts won’t work well on mobile; you can see static versions here.
This interactive chart plots the same data, but gross income vs net income:
Finally, this chart again plots gross vs net income, but adds in the effect of the marriage allowance and a £20k childcare subsidy:
Income tax/NI as for tax year 2023/24 and 2024/25 in the UK and Scotland (but applying the September 2023 national insurance change as if it applied for the whole of 23/24)
One earner in a household, who is over 21 and not an apprentice, not a veteran, and under the state pension age
Ignores benefits aside from child benefit (although benefits are notorious for creating very high marginal rates – not, however, an area where I and our team have expertise). Child benefit assumes three children (you can freely change that in the code).
Doesn’t include tapering of pensions annual allowance (starting at £240k)
Do please send us any corrections, additions or comments.
Richard Tice, the deputy leader of Reform UK, used his Quidnet property company’s REIT status to save tax. That meant Quidnet itself paid no corporation tax on its property business – but the quid pro quo was that its corporate shareholders had to pay tax on the dividends they received. They did not. Instead, Mr Tice signed accounts wrongly claiming that the dividends – £514,000 in total – were tax exempt. The result: they failed to pay £98,000 of corporation tax.
This is a different issue from our previous report, which found that Quidnet REIT failed to withhold about £120,000 of tax on distributions to Mr Tice and his offshore trust. But it arises from the same underlying mistake: claiming the tax benefits of a REIT but ignoring the tax liabilities.
Diagram connections
Diagram connections
From Quidnet REIT to Tice companies (Label: £514k dividend)
From Quidnet REIT to Tice companies (Label: £514k dividend)
Key points:
Quidnet REIT paid about £514,000 of property income distributions to four companies: Tisun One, Tisun Two, Tisun Three and Tisun Four.
Quidnet REIT paid no corporation tax on this income, because it was a REIT. The four Tisun companies were supposed to pay tax instead — but they didn’t.
The payments were wrongly treated in the accounts as tax-exempt ordinary dividends. In fact they were taxable REIT property income distributions.
The result was about £98,000 of unpaid corporation tax.
Mr Tice has previously said the lack of tax was due to losses elsewhere in the group. The accounts contradict that, and our analysis finds there were insufficient losses in the group to eliminate the tax.
HMRC should be able to assess the tax, plus roughly £27,000 of interest and penalties likely in the region of 10–15%.
These are basic errors. That raises a further question: what else went wrong? In particular, did Mr Tice’s offshore trust also fail to pay tax on the distributions it received from the REIT?
Mr Tice did not respond to requests for comment from us or The Sunday Times.
Technical terms in this article
Real Estate Investment Trust (REIT)
A UK company that elects into a special tax regime for property investment. Broadly, the REIT does not pay corporation tax on its qualifying property rental business; the tax point is shifted to investors.
A distribution paid by a REIT out of its property rental business profits or gains. Unlike an ordinary dividend, a PID is generally taxable in the hands of the investor.
Tax deducted by the payer before money is paid out. In the REIT context, PIDs are generally paid under deduction of income tax at the basic rate unless an exception applies.
A normal company dividend. For most UK corporate recipients, ordinary dividends are generally exempt from corporation tax. That is different from a REIT PID.
The main UK tax on company profits. In this article, the key point is that UK companies receiving REIT PIDs are generally taxed on them as property business income.
A UK tax relief allowing certain losses of one company to be surrendered to another company in the same 75% group. It is often used to offset one company’s profits with another’s losses.
Where companies are only in the same group for part of an accounting period, group relief is limited to the period of common ownership. The relevant shared period is called the overlapping period.
A note in a company’s accounts showing how you get from the accounting profit to the tax charge. It can reveal whether a company says tax was reduced by dividends, losses, group relief or something else.
A digital filing format for accounts and tax documents. It looks like an ordinary document on screen, but has machine-readable tags embedded in it so software and regulators can identify what each figure means.
From 10 September 2018 to 9 August 2021, Quidnet was a REIT: a form of tax-exempt investment fund that invests in real estate. The consequence is that the company becomes exempt from corporation tax on its property rental business, but its investors are (broadly speaking) taxed as if they held the real estate directly.1
Quidnet REIT direct shareholders as at 1 July 2021
From Richard Tice (direct) to Quidnet REIT (Label: 13.00%)
From RJS Tice Family Settlement to Quidnet REIT (Label: 16.88%)
From RJS Tice Family SIPP to Quidnet REIT (Label: 34.98%)
From Tisun One to Quidnet REIT (Label: 7.80%)
From Tisun Two to Quidnet REIT (Label: 7.78%)
From Tisun Three to Quidnet REIT (Label: 7.78%)
From Tisun Four to Quidnet REIT (Label: 3.38%)
From Huntress (CI) Nominees to Quidnet REIT (Label: 4.42%)
From NJG Tribe SIPP to Quidnet REIT (Label: 2.99%)
From Employees to Quidnet REIT (Label: 0.98%)
Quidnet REIT correctly paid no tax on its property income. But that shifted the burden elsewhere.
It had to withhold tax on dividends it paid out of that income to Richard Tice and his offshore trust – “property income distributions”. As we’ve previously reported, it didn’t do that. Quidnet mistakenly treated the dividends as ordinary dividends and failed to withhold about £120,000.
This report is about another, potentially more serious, error. Quidnet’s UK corporate shareholders had to pay tax on their dividends. They did not – they treated them as tax-exempt.2
There were four corporate shareholders:3 Tisun One Ltd, Tisun Two Ltd, Tisun Three Ltd and Tisun Four Ltd. The sole director of all four companies was Richard Tice.
Quidnet REIT made about £514,000 of payments to the four Tisun companies.4 None of them ever paid tax.
The consequences are straightforward: HMRC can recover the tax, with interest and penalties. We return to this below.
Richard Tice’s original explanation
The Sunday Times asked Mr Tice why none of the four Tisun companies ever paid any corporation tax. Mr Tice told The Sunday Times that this was because of “wider losses suffered by the group”:
These statements were incorrect:
The accounts do not show losses being used.
There were in fact no tax losses in the group.
The front page of the accounts shows that the Tisun companies had no auditor – the only person who signed the accounts was Mr Tice:
The accounts don’t show loss utilisation
What the Tisun companies’ accounts actually show is an incorrect claim for a dividend exemption.
Here’s Tisun Three Limited’s tax reconciliation from its 2021 accounts (the tax reconciliation shows how you get from the profit in the accounts to the tax charge).
In this period, Tisun Three received £60,906 of property income distributions from the REIT. The accounts show the expected tax charge of £11,572 if you just apply the corporation tax rate of 19% to the £60,906 of income.
The tax reconciliation then explains why this tax doesn’t in fact arise. It shows the £11,572 of tax cancelled-out by a £11,572 negative entry labelled “dividend income”. The meaning is clear: the accounts are saying this was a dividend, and companies are normally exempt from corporation tax on dividends.
The problem is that this wasn’t a normal dividend at all. It was a “property income distribution” from a REIT – the REIT had been exempt on that profit, but corporate shareholders were not exempt. Tisun Three Ltd made the same mistake as Quidnet REIT did – it treated the payments from Quidnet as normal dividends, not as property income distributions.
The company therefore unlawfully failed to pay tax.
The result was that Tisun Three failed to pay tax on £60,906 of income in 2021, meaning lost corporation tax of £11,572 (at the 19% rate at the time).
This is repeated across almost all the Tisun companies accounts for all relevant years.5 You can download all the relevant accounts here.
The total untaxed income was £513,901, and therefore the lost tax was £97,641.6 Our methodology for this calculation is set out in full below.
We should, however, consider the possibility that someone was being sloppy and typed “dividend income” when they really meant “dividend income is sheltered by losses”. If all we had was the printed accounts then we couldn’t exclude that possibility. We can, however, go beyond the printed accounts and read the underlying iXBRL code7 that Tisun Three Ltd’s accounting software uploaded to Companies House. The code for this line is:
This shows that the “(11,572)” figure in the tax reconciliation, negating the tax, was given the tag “TaxIncreaseDecreaseFromEffectDividendsFromCompanies”. This is a specific tag for the dividend exemption.8
If the company really had sheltered its income with losses, we would expect to see a group relief or loss-related reconciliation item (such as “TaxIncreaseDecreaseArisingFromGroupReliefTaxReconciliation”), not a dividends-from-companies item.
The iXBRL code also shows the accounts were submitted using CCH Accounts Production software. Here’s a screenshot showing what the accountant would have seen when entering the figures into that software, and what they would have entered to get the result that we see:
And here’s what they would have entered if they were actually claiming group relief:
The iXBRL code tells us that the tax reconciliation wasn’t merely poorly or sloppily worded – the accountant submitting the return actively selected the dividend exemption – when the dividend exemption could not in fact apply.
Is it theoretically possible tax losses were used?
It is possible in principle that Mr Tice was correct that group relief was claimed, and the accounts are simply wrong. For example, an accountant simply absent-mindedly used the dividend exemption box, when actually the Tisun companies were utilising losses from elsewhere in the group. The tax accountants we spoke to thought this would be unlikely. This is not a “fat finger” error, because it was repeated for three different companies across three years: 2020, 2021 and 2022.
There is, however, a more fundamental problem: our team undertook detailed due diligence of the wider group (including a review of 38 companies’ filings and 260 sets of accounts), and we found no material losses that could have been used to shelter the Tisun companies’ profits. That’s because, in short, the parent of the Tisun companies didn’t have assets or liabilities that could generate a material tax loss, and the way the group was structured means that losses of companies in the wider group were unavailable. Full details of this analysis are set out below.
So we believe we can exclude the possibility that the reason the Tisun companies paid no tax was the availability of losses elsewhere in the group.
Could the accounts just be wrong and tax really was paid?
We can exclude this for two reasons.
First, all four Tisun companies received dividends from Quidnet and then passed them straight up10 to their parent, Tisun Investments, without retaining anything to pay tax. The Tisun companies show no sign of any borrowing to fund any tax liabilities, and no creditor liability reflecting an upcoming tax bill. Their accounts show that each company’s sole asset was its investment in Quidnet REIT shares (funded by an inter-company loan).
Second, when the Sunday Times first asked Mr Tice about the lack of tax in the Tisun companies, he agreed they paid no tax, but said that was because of group relief.
The consequences
This is not tax avoidance. There was no loophole or grey area here. The rules on REIT property income distributions are clear: they are taxable in the hands of UK corporate recipients. This is understood by all advisers and (in our experience) most businesspeople owning and operating REITs.
Nor is this tax evasion – a criminal offence requiring dishonesty and intent. There is no evidence of either here.
The Tisun companies just paid the wrong amount of corporation tax. The practical consequence is that HMRC is likely to seek to recover that tax.
In most cases, HMRC would do this by issuing a “discovery assessment” — reopening a closed tax year where it discovers that tax has been underpaid. This is routine where an error only becomes apparent after the original return was filed.
Where a company has failed to take reasonable care — what the law calls a “careless” error — HMRC has six years from the end of the relevant accounting period to assess the additional tax. All of the periods in question here appear to fall comfortably within that window.11 We expect HMRC’s starting position would be that a failure to tax property income distributions is careless, and it is not obvious what explanation the company could provide that would overcome that.
In addition to the tax itself, penalties are likely. For careless inaccuracies, the statutory penalty range is up to 30% of the tax due. In practice, where the taxpayer cooperates and the error is disclosed, penalties are often lower — commonly around 10–15%.
Interest would also be payable on the late-paid tax: HMRC charges interest automatically on underpaid liabilities, calculated from the original due date, and in this case it would come to about £27,000 – the calculation is below.
There is then a wider question. If Quidnet failed to withhold tax because it didn’t understand the nature of REIT distributions, and the Tisun companies failed to pay tax on those distributions for the same reason… what other errors were made? In particular, did Mr Tice’s offshore trust pay any tax at all on its distributions? It certainly should have done – but the errors we have found make us wonder if in fact it did.
Richard Tice’s response
The Sunday Times wrote to Mr Tice on Thursday. We wrote on Friday:
We didn’t receive a response; neither did The Sunday Times.
Shortly after publication of this report, Mr Tice published a statement. It does not deny any element of our reporting:
Methodology – determining the taxable profit
We calculate the £513,901 figure by:
identifying the REIT distributions (PIDs) declared by Quidnet
matching them to Tisun shareholdings
reconciling against the filed accounts
The first step was to reconcile the dividend income shown in the Tisun accounts against the dividends we know Quidnet REIT declared, and the shareholdings recorded in Companies House filings.
Quidnet’s own accounts explicitly disclose the PID per share for each financial year. The table below sets out, for each year, the total PID per share, the individual dividends that make it up, and the treatment we have adopted:
Financial year
Total PID per share
Individual dividends making up the total
Notes / treatment
FY2019
12.75p
12.75p FY2019 final dividend, paid March 2020.
100% PID.
FY2020
10.43p (weighted annual average)
5.00p H1 interim (paid September 2020 as scrip) + 6.00p FY2020 final (paid April 2021).
100% PID. The 10.43p figure ≈ total FY2020 dividends (£682,432) ÷ year-end shares (6,542,911). The 2020 dividends were paid as scrip — shares in Quidnet rather than cash — but the corporation tax treatment of scrip dividends for a REIT is the same as for a normal company, i.e. identical to cash dividends.
FY2021
6.99p (of which 5.50p H1 interim + 1.49p “REIT-period” slice of the final)
5.50p H1 interim (paid August 2021); 5.30p FY2021 final declared 10 May 2022 for the period 1 July – 31 December 2021.
Quidnet ceased to be a REIT on 9 August 2021. The full 5.50p H1 interim was declared while Quidnet was still a REIT and so we treat it as 100% PID. Of the 5.30p final, only 1.49p qualifies as PID (covering the pre-9 August 2021 part of the post-H1 period); the remaining 3.81p is a post-REIT ordinary dividend and is not PID.
FY2022 onwards
0.00p
—
No PIDs after the REIT period ended.
We can cross-check these figures against the Tisun accounts. For Tisun One, the FY2019 final (£63,028) plus the H1 2020 interim (£26,665) totals £89,693 — the accounts show £89,680 (a trivial difference from scrip share rounding). This gives us high confidence that the PID calculations are correct.
There are, however, three anomalies that affect all the other accounts:
Anomaly 1: the dividends that didn’t exist
As we have reported, in 2020, all of the REIT distributions were paid in shares, not cash. According to Quidnet’s Companies House filings, those shares remained owned by the four Tisun companies. Yet the four sets of accounts show dividends being paid up to their parent company, Tisun Investments. There was no cash to fund those dividends, and no capital raising or increase in creditors to fund a cash dividend.
We don’t think this can be correct, but it’s not clear what happened. However, this does not change our calculations – the tax position is unaffected by whether the four Tisun companies in fact retained the shares or paid them as a dividend to Tisun Investments.
Anomaly 2: the FY2021 ~3.5% shortfall in Tisun One, Two and Three
For the year ended 31 December 2021, each of Tisun One, Two and Three booked dividend income of roughly £2,300 less than the per-dividend, per-share calculation implies. The shortfall is consistent in size (about 3.5%) and consistent in direction (accounts are lower than the calculated figure) across all three companies.
The per-dividend calculation for 2021 is simply the FY2020 final dividend (6.00p PID) plus the H1 2021 interim dividend (5.50p PID), each multiplied by the relevant Tisun shareholding at the record date:
Company
Quidnet shares
FY2020 final 6.00p × shares
H1 2021 interim 5.50p × shares
Calculated 2021 total
Per filed accounts
Shortfall (£)
Shortfall (%)
Tisun One
550,494
£33,030
£30,277
£63,307
£61,029
£2,278
3.6%
Tisun Two
549,383
£32,963
£30,216
£63,179
£60,906
£2,273
3.6%
Tisun Three
549,383
£32,963
£30,216
£63,179
£60,906
£2,273
3.6%
Total
£98,956
£90,709
£189,665
£182,841
£6,824
3.6%
The shareholdings are taken from the Quidnet confirmation statements on file at Companies House. The PID rates are the figures Quidnet discloses in its own 2020 and 2021 accounts: a 10.43p annual PID for FY2020 (broadly equal to the 5p H1 interim plus the 6p FY2020 final — we have treated it as 6p for the final on the basis of the stated per-dividend rates) and a 5.5p interim for H1 2021.
We cannot explain the ~3.6% shortfall. It is consistent in percentage terms across three separately-filed sets of accounts in one year; it could be some kind of intentional methodology but it seems more likely to be a calculation error.
In any event, for the purposes of the corporation tax calculation we will use the amounts Quidnet actually paid, per Quidnet’s audited accounts and the confirmation-statement shareholdings.
The effect is to increase our calculation of the Tisun companies’ taxable PID income by about £6,800 in aggregate, or about £1,300 of corporation tax at 19%.
Anomaly 3: Tisun Four’s dividend that didn’t exist
Tisun Four was incorporated on 11 September 2020 and subscribed for 238,233 Quidnet shares on 21 September 2020. Both dates are after the record date for Quidnet’s H1 2020 interim dividend, so ordinarily Tisun Four should not have received any part of the H1 2020 dividend, only the FY 2020 final dividend (paid in 2021) and then the H1 2021 interim dividend (paid later in 2021).
Tisun Four’s accounts for its first period (11 September 2020 to 31 December 2021) record total dividend income of £37,951. The comparative column in its 2022 accounts splits that 2021 income between a “Final paid” figure of £24,848 for 2020 and an “Interim paid” figure for 2021 of £13,103.
We can reconcile the “interim 2021” figure exactly:
Line in Tisun Four accounts
Amount Booked in Tisun Four’s accounts
Reconciles to line in Quidnet’s accounts
Calculation based on Quidnet accounts and Tisun Four’s holding
Match?
Interim 2021 paid
£13,103
H1 2021 interim @ 5.50p
5.50p × 238,233 = £13,103
Exact
However we cannot reconcile the £24,848 “final 2020” figure against Tisun Four’s actual legal entitlement to dividends in 2020:
Line in Tisun Four accounts
Amount Booked in Tisun Four’s accounts
Reconciles to line in Quidnet’s accounts
Calculation based on Quidnet accounts and Tisun Four’s holding
Match?
Final paid — the 6.00p paid when Tisun Four was shareholder
£24,848
FY2020 final @ 6.00p
6.00p × 238,233 = £14,294
Does not match booked figure
The £24,848 only reconciles against all Quidnet REIT’s 2020 dividends – which is wrong, because Tisun Four shouldn’t have been entitled to the 2020 interim dividend, as it wasn’t a shareholder on the record date.
Line in Tisun Four accounts
Amount Booked in Tisun Four’s accounts
Reconciles to line in Quidnet’s accounts
Calculation based on Quidnet accounts and Tisun Four’s holding
Match?
Final paid (2021 comparative) — as booked
£24,848
Full FY2020 annual PID @ 10.43p
10.43p × 238,233 = £24,848
Exact
This cannot be correct, not least because Quidnet’s 2020 accounts (the statement of changes in equity in particular) only reconciles if the 2020 interim dividend was not paid to Tisun Four.
We will again resolve this by following the Quidnet audited accounts, not the Tisun Four accounts. That has the effect of reducing Tisun Four’s taxable PID income by £10,554, i.e. reducing the tax underpayment by £2,005.
Net effect on the corporation tax calculation
Anomalies 2 and 3 pull in opposite directions but the headline number is unchanged:
Adjustment
PID income
CT at 19%
Tisun One/Two/Three FY2021 shortfall (added back to match Quidnet-paid PID)
+£6,824
+£1,297
Tisun Four H1 2020 excess (removed to match Quidnet)
(£10,554)
(£2,005)
Total adjustment vs. booked accounts
(£3,730)
(£708)
The full reconciliation
Adjusting for the anomalies, and using the Quidnet audited accounts PID rates and the known shareholdings at each dividend record date, we can calculate the PIDs received by each Tisun company:
Dividend
Tisun One
Tisun Two
Tisun Three
Tisun Four
Total
FY2019 final (12.75p PID)
£63,028
£62,900
£62,900
£188,828
H1 2020 interim (5.00p PID)
£26,665
£26,611
£26,611
£79,887
FY2020 final (6.00p PID)
£33,030
£32,963
£32,963
£14,294
£113,250
H1 2021 interim (5.50p PID)
£30,277
£30,216
£30,216
£13,103
£103,812
FY2021 final (1.49p PID)
£8,202
£8,186
£8,186
£3,550
£28,124
Total PIDs
£161,202
£160,876
£160,876
£30,947
£513,901
The FY2019 final and (subject to anomaly 3) the H1 2020 interim dividends pre-date Tisun Four’s existence – it was incorporated in September 2020. The later dividends were received by all four companies.
This produces total taxable income of £513,901. The corporation tax rate at the time was 19%, and so the unpaid tax was £97,641.
Methodology – group relief
The Tisun group from 20 November 2020
At the time of the later REIT payments, the Tisun companies were in a small group. This diagram shows the group, and the other Quidnet REIT shareholders:
Tisun / Quidnet group structure as at 1 July 2021
From Richard Tice to Tisun Holdco (Label: 77.1%)
From Richard Tice to Tisun Holdco (Label: 22.9%)
From Tisun Holdco to Tisun Investments (Label: 100%)
From Tisun Investments to Tisun One (Label: 100%)
From Tisun Investments to Tisun Two (Label: 100%)
From Tisun Investments to Tisun Three (Label: 100%)
From Tisun Investments to Tisun Four (Label: 100%)
From Richard Tice (direct) to Quidnet REIT (Label: 13.00%)
From RJS Tice Family Settlement to Quidnet REIT (Label: 16.88%)
From RJS Tice Family SIPP to Quidnet REIT (Label: 34.98%)
From Tisun One to Quidnet REIT (Label: 7.80%)
From Tisun Two to Quidnet REIT (Label: 7.78%)
From Tisun Three to Quidnet REIT (Label: 7.78%)
From Tisun Four to Quidnet REIT (Label: 3.38%)
From Huntress (CI) Nominees to Quidnet REIT (Label: 4.42%)
From NJG Tribe SIPP to Quidnet REIT (Label: 2.99%)
From Employees to Quidnet REIT (Label: 0.98%)
A company in a group can use “group relief” to utilise another group member’s tax trading losses, property business losses, and losses on certain financial and other types of assets, but not losses on capital assets.
There are, furthermore, stringent conditions for companies to be in a group relief group. There has to be a 75% common corporate shareholding (i.e. not via an individual owner). So the only possible companies that could have generated losses for the four Tisun companies are those in this diagram, and not other companies held separately by Mr Tice.12
Tisun Holdco never had any material assets or liabilities other than its shareholding in Tisun Investments.13 That leaves Tisun Investments Ltd as the only entity that could in principle have had losses that the four Tisun companies could have used. Tisun Investments’ accounts for 202014, 2021 and 2022, show that it did have sizeable accounting losses every year. However the nature of its assets and liabilities mean that we expect almost none of these losses would be recognised for tax purposes.
Tisun Investments Ltd’s assets were:
Two flats in Kent, combined into a single dwelling, in a building where all the other flats are now owned by the Tice family. The value of the dwelling was around £600,000 and at the time in question it was unmortgaged.15 So, whether used by the family or rented out, the property is unlikely to have generated material tax losses, and certainly not the ~£170k/year needed to shelter the Tisun profits.16
A motor vehicle on hire purchase – likely a personal car. The cost of this may be partially allowable for tax purposes, but the amounts are not material (probably £5-15k each year of capital allowances and running costs).
Unlisted investment assets, never more than £120,000. We don’t have any information about what the investments are, but the limited value means that they won’t have justified material management expenses, and any loss on disposal would be a capital loss (which can’t be used to shelter trading profits or property income).
Shareholdings in its subsidiaries – Tisun One, Two, Three and Four, and JMT Holdco. Management expenses incurred wholly and exclusively for the purposes of managing these assets would be tax deductible; but given the passive nature of the companies, it’s difficult to see how that could generate material deductible costs.
Loans to its subsidiaries (Tisun One, Two, Three and Four), and its parent, (Tisun Holdco).17 Loans to connected parties generally generate no deductible debits for the lender (even if impaired or written off). The Tisun subsidiaries’ accounts suggest no interest is charged but, even if it was, the tax deductions for the payer would be matched by taxable income in Tisun Investments. These loans are therefore not a plausible source of net deductible tax losses.
Loans to related parties, with a balance fluctuating between £0.8m and £1.1m. These include loans to Richard Tice personally, to Reform UK, and to other connected parties. The loans are all either interest-free or non-commercial. Non-commercial loans don’t generate deductible losses for the lender, and (again) neither do loans to connected parties.
Its liabilities were:
270,000 preference shares at 7% – treated as debt for accounting purposes but not for tax purposes, so no tax deduction available.
£1,679,712 owed to JMT Corporation, an associated company that’s not part of the group relief group. The loan is interest-free18, so doesn’t generate any losses for Tisun Investments.
Loans from related parties – again, these appear to be non-commercial funding arrangements. Any associated costs would be unlikely to be deductible, and there is no evidence of significant interest expense in the accounts.
We therefore conclude that Tisun Investments Ltd did not generate material losses that could be used to shelter profits elsewhere in the group. It looks like the company’s accountants agreed, as there’s no sign of a deferred tax asset, or any mention of losses or group relief.
It follows that the accounting did not merely misstate a group relief claim as a dividend exemption. There was no group relief in 2021 and 2022.
The Tisun group in 2020
Until 20 November 2020, Tisun Investments and its subsidiaries were part of a much larger group, headed by Sunley Family Holding Ltd.1920
Sunley / Tisun group structure as at 19 November 2020
From Sunley Family Holding to Sunley Family Limited (Label: None)
From Sunley Family Holding to Tisun Investments (Label: None)
From Sunley Family Holding to JMT Corporation (Label: None)
From Sunley Family Holding to West Eleven Investments (Label: None)
From Sunley Family Holding to William Tice Family (Label: None)
From Sunley Family Limited to Sunley Holdings (Label: None)
From Sunley Holdings to Sunley Estates (Label: None)
From Sunley Holdings to Executive Centre Brighton (Label: None)
From Sunley Holdings to Environ (Kent) (Label: None)
From Sunley Holdings to Bach Homes (Sunley) (Label: None)
From Sunley Holdings to GMH (2004) (Label: None)
From Sunley Holdings to SP (2004) (Label: None)
From Sunley Holdings to Sunley FPR (Label: None)
From Sunley Holdings to Fairfax Shelfco 321 (Label: None)
From Sunley Family Limited to Prospero 2006 (Label: None)
From Sunley Family Limited to Sunley Investments (Label: None)
From Tisun Investments to Tisun One (Label: None)
From Tisun Investments to Tisun Two (Label: None)
From Tisun Investments to Tisun Three (Label: None)
From Tisun Investments to Tisun Four (Label: None)
In the interests of clarity, the diagram omits the REIT and its other shareholders. It also omits a large number of inactive and/or dormant companies21, and entities (LLPs, settlements) which are not companies and so not relevant for group relief purposes.
During this period, Tisun Investments’ assets and liabilities were, so far as material, as set out above regarding the post-2020 period – so it had no losses to surrender to the Tisun companies. However the Sunley group had companies with much a wider and more extensive degree of activity than Tisun Investments, and some of the Sunley companies could have had large losses – potentially hundreds of thousands of pounds.22232425 So, at first sight, this could be an answer to how the Tisun companies’ 2020 profits were eliminated.
There is, however, a technical barrier that means in fact no losses the Sunley group could be used by the Tisun companies. Sunley Family Ltd had a “tracking share”26 structure. The economic rights to Tisun Investments Limited were not held by the wider Sunley group but were reserved to holders of Sunley Family Ltd’s “B ordinary shares”.27 Those B shares were held by Richard Tice – partly for himself, and partly as trustee for his Tice children. This “broke” the tax group – if the economic interest in a company is held by a third party then it’s no longer a member of its parent company’s tax group:
The group relief legislation is in Part 5 CTA 2010. The basic rule is that two companies are in the same group if one is a 75% subsidiary of the other, or both are 75% subsidiaries of a third company.
There are a further series of complex tests which mean that if the economic rights of the subsidiary are in fact with a third party, the subsidiary is not in its parent’s tax group. The statutory gateway for this is section 151 CTA 2010.28
HMRC explain the policy rationale in CTM81005. The rules are designed to stop group relief where the apparent parent is not the true economic parent – otherwise it would be easy for economically unrelated companies to use each other’s losses. 29
It follows that Tisun Investments was not part of the Sunley group for tax purposes.30
The Sunley losses are therefore irrelevant – however large they were, they couldn’t have been used by the Tisun companies. The only potential source of losses for the four Tisun companies was Tisun Investments and, for the reasons set out above, it had no material tax losses.
Earlier periods
Tisun One, Two and Three were incorporated on 6 July 2018, and Tisun Four was incorporated on 11 September 2020. But Tisun Investments Ltd was not a newly-created shell when the Quidnet REIT structure was put in place: it had existed since 2006 and, as its filed accounts show, had a mixture of investment, property, loan and short-lived work-in-progress activity over the years.
However, any tax losses from these earlier activities could not have sheltered the £514,000 of Quidnet REIT property income distributions received by the Tisun companies. Until 1 April 2017, carried-forward losses in one company could never be surrendered as group relief to shelter the profits of another company at all – they stayed locked in the company that made them. From 1 April 2017, the new Part 5A CTA 2010 regime allows carried-forward losses to be surrendered as group relief, but only if they arose on or after 1 April 2017 and only where the surrendering and claimant companies were members of the same group when the loss arose.31 Pre-2017 Tisun Investments losses are therefore locked inside Tisun Investments.
For completeness, we reviewed every filed set of Tisun Investments accounts from 2007 to 2024.32 The picture is of an investment/holding company with some short-lived property and work-in-progress activity, paying tax in several years and with no material carried-forward losses.
Methodology – interest calculation
We calculated late-payment interest using HMRC’s published late-payment rates, applying simple daily interest to the corporation tax outstanding in each period. The first period starts on 1 October 2021, the first deadline for paying the tax. The amount outstanding then increases when later corporation tax liabilities fall due:
Period
HMRC rate
Amount owed
Interest
1 Oct 2021 to 7 Jan 2022
2.60%
£51,055.85
£356.41
7 Jan 2022 to 21 Feb 2022
2.75%
£51,055.85
£173.10
21 Feb 2022 to 5 Apr 2022
3.00%
£51,055.85
£180.44
5 Apr 2022 to 24 May 2022
3.25%
£51,055.85
£222.76
24 May 2022 to 11 Jun 2022
3.50%
£51,055.85
£88.12
11 Jun 2022 to 5 Jul 2022
3.50%
£56,261.28
£129.48
5 Jul 2022 to 23 Aug 2022
3.75%
£56,261.28
£283.23
23 Aug 2022 to 1 Oct 2022
4.25%
£56,261.28
£255.49
1 Oct 2022 to 11 Oct 2022
4.25%
£92,297.63
£107.47
11 Oct 2022 to 22 Nov 2022
4.75%
£92,297.63
£504.48
22 Nov 2022 to 6 Jan 2023
5.50%
£92,297.63
£625.85
6 Jan 2023 to 21 Feb 2023
6.00%
£92,297.63
£697.92
21 Feb 2023 to 13 Apr 2023
6.50%
£92,297.63
£838.26
13 Apr 2023 to 31 May 2023
6.75%
£92,297.63
£819.30
31 May 2023 to 11 Jul 2023
7.00%
£92,297.63
£725.74
11 Jul 2023 to 22 Aug 2023
7.50%
£92,297.63
£796.54
22 Aug 2023 to 1 Oct 2023
7.75%
£92,297.63
£783.90
1 Oct 2023 to 20 Aug 2024
7.75%
£97,641.19
£6,717.18
20 Aug 2024 to 26 Nov 2024
7.50%
£97,641.19
£1,966.20
26 Nov 2024 to 25 Feb 2025
7.25%
£97,641.19
£1,764.90
25 Feb 2025 to 6 Apr 2025
7.00%
£97,641.19
£749.03
6 Apr 2025 to 28 May 2025
8.50%
£97,641.19
£1,182.39
28 May 2025 to 27 Aug 2025
8.25%
£97,641.19
£2,008.33
27 Aug 2025 to 9 Jan 2026
8.00%
£97,641.19
£2,889.11
9 Jan 2026 to 15 Apr 2026
7.75%
£97,641.19
£1,990.28
£26,855.91
The calculation runs to 15 April 2026 and assumes no tax was paid before then.
This issue was identified by one of our contributors, D. We developed this report in conjunction with Gabriel Pogrund of the Sunday Times, who discovered the initial tax issues with the Quidnet structure.
The REIT and accounting analysis for this and our original report was mostly from K, M1, and P1, with additional insights from D, R, P2 and M2. Thanks to J, B and M3 for practical advice on, and demonstrations of, the CCH accounting software used by the Tisun companies.
And finally thanks to all the volunteers who worked on the group relief due diligence, reviewing filings for 38 companies and 260 sets of company accounts.
The logic is that funds don’t pay tax; their investors do – we see this across almost all forms of investment fund, although it’s achieved in a variety of different ways. ↩︎
When a UK company receives a normal dividend from another company, it doesn’t pay tax – there’s a corporation tax exemption for dividends. The reason is that the subsidiary would have paid tax on its profits, so it makes no sense to tax them again. However property income distributions from REITs are different. A REIT does not pay tax on its property income. So it stands to reason that a UK company receiving a property income distribution pays corporation tax on it – and that is indeed the result. ↩︎
Why have so many companies? At the time, the REIT rules penalised a REIT if any single corporate shareholder held 10% or more. By splitting a single ~27% holding across four companies, each holding under 10%, it was straightforward to avoid the prohibition. The 10% rule was regarded as rather pointless by both taxpayers and HMRC and changes in 2023 mean it now rarely applies. All of which means that we would regard the splitting of the ownership (of itself) as tax planning, not tax avoidance; we don’t believe HMRC would have any realistic prospect of challenging it. ↩︎
Because they were UK companies, there was no requirement for Quidnet REIT to withhold tax. ↩︎
We see the same exact approach in the Tisun One, Tisun Two and Tisun Three accounts from 2020 to 2022, and the Tisun Four accounts for 2022. Tisun Four has no tax reconciliation for 2020 and 2021 but its accounts for these two years are otherwise consistent with the other ten accounts. In 2022, the companies did receive some ordinary dividends which really were exempt, but also property income distributions which were not. Our reconciliation distinguishes the two cases. ↩︎
These figures fully take into account that some dividends were ordinary dividends which absolutely were exempt. ↩︎
When a UK company files accounts electronically, it often does not send Companies House a simple PDF. Instead, it sends an iXBRL file: a document that looks like ordinary accounts on screen, but with machine-readable tags embedded behind the text and numbers. The tags were standardised by the Financial Reporting Council – you can see and search them all here. ↩︎
Also note that the £60,906 income in the tax reconciliation statement is given the tag “DividendIncome”; not technically correct. ↩︎
The screenshots are from the current version of CCH Accounts Production; we understand from the accountants we spoke to that the screens were the same in 2020, 2021 and 2022. ↩︎
Subject to an oddity about scrip dividends, discussed further below. ↩︎
i.e. because the earliest accounting period ended 31 December 2020, meaning HMRC has until 31 December 2026. ↩︎
A significant entity – JMT Corporation Ltd – is excluded from the diagram and analysis below because, whilst it is held by Tisun Investments, it isn’t part of a 75% group with the Tisun companies and so can’t surrender losses to them. JMT Corporation was Richard Tice’s late mother’s former investment company. JMT Holdco was incorporated in March 2020, held by Richard Tice directly – it then acquired JMT Corporation. At some point between March and December 2021, Tice sold 55.4% of the shares in JMT Holdco to Tisun Investments; Tisun Investments therefore treats it as a subsidiary for accounting purposes (but it’s not part of a group relief group). By 2024, JMT Corporation’s sole material asset was a £1.66m intercompany loan to Tisun Investments. ↩︎
It was incorporated on 17 March 2020. From 2020 to 2023 it appears to have been a very thin holding company: its only visible asset was its 100% shareholding in Tisun Investments Limited, carried at £32,418, and its only visible liabilities were short-term group creditors and, in 2020-2021, accruals/deferred income. The filed accounts do not include a profit and loss account. From the balance sheet/reserve movements only, the apparent results are: 2020 loss £925; 2021 nil movement; 2022 positive movement/profit £925; 2023 nil movement. ↩︎
Note the 2020 accounts were massively restated the following year; the 2020 accounts themselves show a large profit. ↩︎
In late 2022, a further part of one of the flats was acquired, worth £126,000, and a £491,000 mortgage with Weatherbys was taken out over all three titles the following year 2023. ↩︎
The building is on a private estate. We have full details of the dwelling, have reviewed planning consents, and believe we have identified how the dwelling is used; we are, however, not publishing further details given the possible privacy implications for the Tice family. ↩︎
The identity of the borrowers is not explicitly disclosed but the £2,064,976 “owed by group undertakings” in Tisun Investments’ 2024 accounts exactly reconciles to the balances shown in the latest accounts of the four Tisun subsidiaries and Tisun Holdco. Tisun One shows £559,961 owed to group undertakings, Tisun Two £558,960, Tisun Three £558,960, Tisun Four £369,500 and Tisun Holdco £17,595, giving £2,064,976 in total. ↩︎
We know JMT Corporation was the lender because JMT Corporation’s 2022 accounts show a matching amount “owed by group undertakings”. We know it’s interest-free because we can use JMT Corporation’s balance sheet to reverse-engineer its profit and loss account. The accounts show the company’s total assets decreasing by £31,261 as it liquidated its entire £488,192 investment portfolio, drew down its cash and other debtors, and used these funds to increase the pre-existing loan to Tisun Investments. Concurrently, total liabilities decreased by £17,229 as the company paid down historical short-term creditors and deferred tax provisions. Offsetting the £31,261 drop in assets against the £17,229 reduction in liabilities results in a net asset decrease of £14,032, which matches the company’s reported loss for the year. We see the same in other years. We conclude that there cannot have been any interest received on the loan to Tisun Investments. ↩︎
Until October 2020, Tisun Investments sat “lower” in the group, under Sunley Family Limited group. In October 2020 it moved under Sunley Family Holding Ltd, and on 20 November 2020 it moved out to Tisun Holdco. We discuss the consequence of that below. We show the October to November 2020 picture for clarity. ↩︎
In particular, Sunley Estates Limited was a substantial property company. Its 2020 accounts show investment property of £2.1m, group debtors of £12.2m, group creditors of £1.5m and net assets of £13.6m. Its profit and loss account grew from £8,862,526 in 2019 to £9,426,401 in 2020, telling us that the company’s total profits were £563,875 that year (the accounts disclose no dividends). However we need to reverse out two elements that are disregarded for tax purposes: a £1,171,448 positive revaluation of property assets, and a “deferred tax” provision of £222,575. That tells us the company may actually have made a loss of about £385,000. That is absolutely not a robust number – it’s possible that some or even all of this loss would disappear if we actually knew the underlying revenue and expense items. The loss would also be smaller or disappear if dividends were paid. Subsequent accounts (and the lack of any obvious utilisation against later profits here or elsewhere) suggest to us this may not actually have been a tax loss. Nevertheless, we conservatively assume that the tax loss we’ve inferred was real. ↩︎
West Eleven Investments looks much larger at first sight. Its net assets fell from £1,497,834 to £1,151,898, and its profit and loss reserve moved from a £2,176 deficit to a £348,112 deficit. That is a raw reserve fall of about £346,000. But the notes show a £399,546 tangible-asset revaluation loss and a £35,653 investment revaluation gain. Reverse those revaluations and the large apparent loss disappears entirely — the adjusted position is a small profit, not a loss. But, again, it doesn’t matter how many losses were generated – the overlapping period rules still apply. ↩︎
William Tice Family may have generated some small losses. Its net assets increased from £1,936,930 to £1,967,402, and its profit and loss reserve increased from £724,348 to £754,820. It therefore did not show an accounting loss overall. The accounts include a £69,540 investment revaluation gain and deferred tax increased from £94,389 to £121,235; stripping those out suggests, at most, a small underlying loss of about £12,000. ↩︎
On the (rare) occasions when these companies submitted full accounts, there was evidence of group relief. Sunley Holdings Limited’s accounts for 2017 and for 2019 show group relief surrendered and received. JMT Corporation Limited’s 2011 accounts show losses surrendered. However neither company filed full accounts in 2020 and so this doesn’t help us determine if losses were surrendered in 2020. ↩︎
This is sometimes done where for e.g. historic/tax/contractual reasons shares have to stay owned by one person/company, but it’s been agreed that actually all the benefit should go to someone else. In other words, it’s a way of executing a demerger without all the consequences of an actual demerger. ↩︎
The B shares were created on 13 October 2006, reclassifying 12,512 ordinary shares held by Richard Tice as B ordinary shares tracking all economic rights in Tisun Investments (defined to be “B Company Limited”). A 2010 resolution re-designated 3,713 D ordinary shares as B ordinary shares, ranking pari passu with the existing B ordinary shares. The structure was restated in new articles adopted in December 2014. Those articles again defined “B Company Limited” as Tisun Investments Ltd and preserved the same tracking rights over distributions and assets from that company. By the 2020 confirmation statement there were 16,225 B ordinary shares. The structure was then unwound in October 2020. A 16 October 2020 share-exchange resolution put Sunley Family Holding Limited above Sunley Family Limited. A 19 October 2020 dividend-in-specie resolution then declared a dividend on the B ordinary shares, satisfied by transferring the entire issued share capital of Tisun Investments Ltd. The result was that Tisun Investments was now in both the legal and the economic ownership of Mr Tice. ↩︎
HMRC’s CTM81121 example illustrates the same point: ordinary share capital can give the appearance of a group, but if the profit rights show someone else is the true economic parent, the group-relief relationship fails. ↩︎
A point of detail: on 19 October 2020, Sunley Family Limited transferred the issued share capital of Tisun Investments to Sunley Family Holding Limited by dividend in specie; the B shares remained so Tisun Investments did not join Sunley Family Holding Ltd’s tax group. Then on 20 November 2020, Tisun Investments was acquired by Tisun Holdco. ↩︎
A separate anti-avoidance rule in CTA 2010 Part 14, Chapters 2C and 2D (ss.676CB, 676CE and 676CH) also blocks pre-entry carried-forward losses from being surrendered as group relief for five years after an accounting period in which there is a change of ownership of the surrendering company. ↩︎
The deputy leader of Reform UK, Richard Tice, owns a property company – Quidnet REIT Limited. From 2020 to 2022 it paid around £600,000 of dividends to Mr Tice and his offshore trust. Quidnet was required by law to withhold approximately £120,000 of tax from those dividends and pay it to HMRC. But we believe it’s clear from the company’s accounts and public filings that Quidnet did not pay this tax.
Mr Tice has refused to answer the question directly, instead saying that he paid income tax on the dividends. That’s not an answer: the company was legally required to pay tax; the law doesn’t permit REITs to opt to defer their tax obligations.
The issue was first identified by Gabriel Pogrund of The Sunday Times – his report is here. Since the paper went to press we have conducted further analysis of the two last dividends, and so the figures in this report are higher than those reported in The Sunday Times.
Quidnet REIT
Quidnet REIT Limited is a property company controlled by Richard Tice, the deputy leader of Reform UK.
From 10 September 2018 to 9 August 2021, Quidnet was a REIT: an investment fund that invests in real estate. A company wishing to become a REIT has to apply to HMRC; the consequence is that the company then becomes exempt from corporation tax on its property rental business, but its investors are (broadly speaking) taxed as if they held the real estate directly. The logic is that a REIT is an investment fund, and the usual principle is that funds don’t pay tax; their investors do.
However, Mr Tice’s REIT was unusual: throughout its life, it was almost entirely owned by him and entities connected to him.
REITs are usually required to be widely held by different investors – they’re supposed to be genuine investment funds, not tax planning vehicles. The rules provide for a three year grace period in which REITs can become compliant but, as The Sunday Timespreviously reported, Quidnet REIT Ltd never attracted more than a small number of outside investors. Quidnet therefore ceased to be a REIT on 9 August 2021.
It’s unclear if real efforts were made to find outside investors – if they were not then we would regard this as aggressive tax avoidance which probably does not work technically.1 However this article is not about tax avoidance. It’s about what appears to be a simple failure by Richard Tice’s company to pay the tax that was due.
The tax Quidnet failed to pay
As a UK REIT, Quidnet was required to distribute at least 90% of its tax-exempt property rental profits to shareholders as “Property Income Distributions” (PIDs). This is essentially the quid pro quo for the REIT tax exemption – you have to pay profits to your shareholders, and the expectation is that (unless they’re exempt) they’ll be taxed on those profits.
But HMRC isn’t content to just wait for the shareholders to pay tax. That could be over a year from the date the profits were made. There’s also a risk that the investors would simply fail to pay tax on the dividends they receive. So, just as an employer is required to withhold PAYE tax when paying wages to its employees, a REIT is required to withhold basic rate income tax (20%) from its dividends, and pay it to HMRC. Dividends paid to UK pension funds (such as SIPPs) and UK companies are exempt from this withholding requirement. The Assura plc REIT has published a helpful summary of the rules.
Quidnet paid around £600,000 in REIT dividends, or PID components of dividends,2 to Mr Tice and his offshore trust3 – the RJS Tice Family Settlement.
Quidnet should have withheld around £120,000 of income tax from these dividends, and paid it to HMRC. There is, however, no sign of this in the company’s cash flow statement – the tax should have been there (either under tax or dividends), and it isn’t:4
The “methodology” section below goes through a detailed analysis of how, independently from the accounting treatment, we can be confident that the company failed to withhold around £120,000 of tax.
The obligation for a REIT to withhold tax is well understood and (absent very unusual circumstances) we expect HMRC would say that the failure to withhold tax was careless. On that basis, HMRC would have six years to make an assessment and collect the tax5 plus interest and penalties.6
Richard Tice’s response
We wrote to Mr Tice seeking comment for this story. We received a response which failed to engage with the substance of the matter. Here’s our initial request, the response from Mr Tice’s lawyer, and our reply.
Tice, the Boston & Skegness MP, implied the failure amounted to a “technicality” and appeared to suggest it did not matter as he ultimately paid income tax on the dividends he received. He said: “I have paid all tax at the highest rate on all dividends received. HMRC has been paid in full.”
And then, shortly after we published this report, on X:
Mr Tice’s certainty that the correct overall amount of tax was paid is inconsistent with his solicitor’s complaint that Mr Tice hasn’t had time to refer the point to his accountants. And Mr Tice also doesn’t mention the Jersey trust – it’s unclear if the trust paid UK tax at all.
But the more important point is that, regardless of what tax was paid by Mr Tice and his trust, REITs and their investors have no choice how and when tax is paid. The law requires that a REIT withhold tax from its dividends immediately. It would be much more convenient for its shareholders if they could skip the withholding and wait to pay all the tax until they file their own tax return, up to 21 months later. The law, however, does not permit this. The law is also straightforward and, in our experience, well understood in the REIT industry.
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. 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.
Methodology
Many of the dividends in question were either paid by issuing new shares, or satisfied by issuing new shares. New shares are tracked in company records, and this gives us a second independent confirmation that there was a failure to withhold tax as required by law (in addition to the cashflow statement in the accounts).
The shareholdings
At the start of the period in question (July 2019), Quidnet had seven shareholders. Dividends paid to UK companies and pension funds are exempt from REIT withholding, leaving two shareholders subject to withholding tax on Quidnet’s dividends:
Richard Tice personally — 824,100 shares (15.36% of the total)
His Jersey trust — 1,033,598 shares (19.26% of the total)
Together they held 34.62% of the company’s 5,366,193 ordinary shares.7
The dividends
There were three types of dividends paid by Quidnet, and the 20% withholding tax rule applies to them all in a slightly different way:
Simple cash dividends Tax is simply deducted at 20%. So, for example, if a dividend of £100 is declared to an individual REIT shareholder, then £20 should be withheld by the REIT and remitted to HMRC, and £80 paid to the shareholder:
Diagram connections
Diagram connections
From REIT declares £100 cash dividend to HMRC (Label: £20 tax withheld)
From REIT declares £100 cash dividend to Investor (Label: £80 dividend)
Scrip dividends Instead of paying a dividend in cash, a company can pay a “scrip” dividend by issuing new shares to the shareholders.
A scrip dividend is subject to withholding in the same way as a cash dividend. So, for example, if a dividend of £100 is declared to an individual shareholder, and satisfied by issuing 100 shares worth £1 each, then the REIT should withhold 20 shares, issue 80 shares to the shareholder and pay £20 to HMRC.9
Diagram connections
Diagram connections
From REIT pays scrip dividend of 100 £1 shares to HMRC (Label: £20 tax withheld)
From REIT pays scrip dividend of 100 £1 shares to Investor (Label: 80 £1 shares issued)
For an example of how this is usually done in practice, see the bottom of page 3 of this document from LondonMetric Property Plc, and the worked example on the following page.
Dividend reinvestment plan
A company can declare a normal cash dividend but then satisfy it by issuing shares to investors, sometimes at the investors’ option (in which case it is often called a “dividend reinvestment plan” or DRIP). The end result looks the same as a scrip dividend, but legally it’s just a cash dividend followed by a share subscription. So, for example:
Diagram connections
Diagram connections
From REIT declares £100 cash dividend to HMRC (Label: £20 tax withheld)
From REIT declares £100 cash dividend to Investor (Label: Investor opts to receive 80 £1 shares instead of cash)
There’s an example here of how this is usually done – “the net dividend after tax is effectively reinvested by acquiring additional shares in the Company” (our emphasis).
The following paragraphs look in detail at the dividends paid out of REIT profits, and therefore subject to the withholding rules.
Dividend 1: FY2019 final (March 2020)
On 16 March 2020, the board declared a dividend of £684,055 for the year ended 31 December 2019. On the same day, it resolved to issue 423,040 new shares at £1.617 per share.10
The value of the shares issued — 423,040 × £1.617 = £684,055.68 – matches the gross dividend.11 This wasn’t a scrip dividend, but a cash dividend – satisfied in shares, with zero cash paid out.
If Quidnet had properly withheld 20% tax, it should have issued approximately 29,300 fewer shares and remitted around £47,364 to HMRC.12 Instead, shares were issued for the full gross value of the dividend – that provides independent confirmation (in addition to the accounts) that there was a failure to pay the correct tax.13
We can conclude that no tax was withheld from the £237,000 of dividends paid to Mr Tice and his trust, and £47,400 of tax was underpaid.
Dividend 2: H1 2020 interim (September 2020)
On 25 August 2020, Quidnet declared an interim dividend of 5p per ordinary share, to be paid on 21 September 2020 “by issuing shares at the new NAV per share of 155.1 pence”.
The announcement stated that “Shareholders are to receive 1 share for every 31.02 ordinary shares held”. A TISE announcement on 18 September 2020 confirmed that 186,627 shares settled the scrip dividend.14
This was a true scrip dividend. The conversion ratio is uniform for all shareholders — every holder gets 1 new share per 31.02 held, regardless of their tax status. If 20% had been withheld from non-exempt shareholders, the effective dividend would be 4p (not 5p) per share, and at an NAV of 155.1p this gives a ratio of 4/155.1 = one share for every 38.78 shares held.
Richard Tice received 28,661 shares worth about £44k. The trust received 35,947 shares worth about £56k. Both should have been subject to 20% withholding tax, but there’s no sign of that in the figures.15
We conclude that no tax was withheld from the c£100,000 of scrip dividends paid to Mr Tice and his trust, and around £20,000 of tax was underpaid.
Dividend 3: FY2020 final (April 2021)
On 17 March 2021, Quidnet declared a final dividend of 6p per ordinary share for the year ended 31 December 2020, with shareholders having the option16 to apply the dividend to subscribe for ordinary shares.
A small amount of this dividend was an ordinary dividend, not a property income distribution.17
By cross-referencing the share register18, we can determine that Richard Tice personally took this dividend in cash, receiving £55,000 cash, and the trust took the dividend in shares, receiving 40,145 shares worth £64,000.1920
Once again, the full gross dividend was distributed with no apparent deduction for withholding tax.21 The trust received about £64,000 in shares, of which approximately £62,500 was a PID from which £12,500 should have been withheld. Mr Tice received about £55,000 in cash, of which approximately £50,000 was a PID from which £10,000 should have been withheld. And again, there’s no sign of any tax being withheld in the company’s cash flow statement for 2021.
We conclude that no tax was withheld from the c£112,000 of PIDs paid to Mr Tice and his trust, and so about £22,500 of tax was underpaid.
Dividend 4: H1 FY 2021 (August 2021)
On 17 August 2021, Quidnet announced its interim results for the six months to 30 June 2021, and declared a further cash dividend of 5.5p per share, payable on 23 August 2021. Quidnet ceased to be a REIT on 9 August 2021. However this dividend was paid out of profits made when Quidnet was a REIT, and so we expect was fully subject to the REIT withholding tax rules.
To satisfy some of this dividend, filings show the company issued 132,212 new shares in late August at the newly reported net asset value of £1.613 per share.
Because we have the exact share counts from the July 2021 confirmation statement, we can calculate precisely what was owed and how it was paid. The trust held 1,191,173 shares, entitling it to a gross dividend of £65,515 (1,191,173 × 5.5p). If we divide the trust’s £65,515 gross dividend by the £1.613 share price, it equates to an allocation of 40,611 shares. Confirmation statements show the trust’s shareholding increasing by precisely that amount.22 This confirms the trust elected to take its entire 5.5p dividend as scrip, and that the shares were issued for the full gross amount, with no shares withheld for tax.
At that time, Richard Tice held 917,728 shares, entitling him to a gross dividend of £50,475 (917,728 × 5.5p). His shareholding remained unchanged after this; confirming he took his £50,475 dividend entirely in cash. Just as with the previous dividends, there is no evidence the company operated the required 20% tax deduction on this cash payment.
We conclude that no tax was withheld from the c£116,000 of dividends paid to Mr Tice and his trust, and so about £23,000 of tax was underpaid.
Dividend 5: FY 2021 final (10 May 2022)
On 10 May 2022, Quidnet announced a final cash dividend of 5.3p per ordinary share. This covered the period from 1 July 2021 to 31 December 2021. Quidnet was only a REIT for a small amount of that time. In principle the rules require withholding to be applied to such amount of that dividend as attributable to profits made during the REIT period. The accounts disclose total Property Income Distributions of 6.99p per share for FY2021; if the H1 2021 interim dividend was entirely a PID, that implies a PID element of 1.49p per share for this final dividend.23
On that basis, we estimate that the REIT rules applied to approximately £14,00024 of dividends paid to Mr Tice (received in cash) and £18,00025 of dividends paid to the trust. That’s a total of £32,000 – but there’s no sign of any income tax deducted in the accounts.26 It follows that £6,400 was underpaid.
Total tax at stake
Looking at the overall position:
Dividend Period
Type
PID paid to Tice and Trust
Unpaid income tax
FY2019 Final
Cash (Settled in Shares)
£236,810
£47,362
H1 2020 Interim
Scrip
£100,207
£20,041
FY2020 Final
Cash / Scrip Mix
£112,334
£22,467
H1 FY2021
Cash / Scrip Mix
£115,990
£23,198
FY2021 Final
Cash (accounts-based PID estimate)
£32,028
£6,406
TOTAL
£597,369
£119,474
The company’s accounts disclose Property Income Distributions of 12.75p per share for FY2019, 10.43p for FY2020, 6.99p for FY2021, and 0.00p for FY2022. Reconciling those figures to the dividend announcements produces the estimate above.
HMRC would be able to collect the £119,474 by a simple assessment. Whilst ordinarily a taxpayer receives a credit for tax that was withheld, Mr Tice is now out of time to claim an overpayment for 2019 to 2021. In a sense this is unfair – tax will have been paid twice. But Mr Tice established a structure in careful adherence to the letter of the rules in order to obtain a tax benefit. When you do this, HMRC tends to be unsympathetic to complaints of double taxation, and the courts have historicallyagreed. The courts have also held that HMRC has no discretionary authority to extend the overpayment correction period.
Disclosure
Dan Neidle, the founder of Tax Policy Associates, is a member of the Labour Party. Tax Policy Associates has no political affiliation. Our previous reports suggesting politicians failed to pay the tax due investigated Angela Rayner, Keir Starmer, Ian Lavery and Nadhim Zahawi.
Many thanks to Gabriel Pogrund of the Sunday Times, who discovered this story, and to K and M for the REIT and accounting analysis that underpins this report. Thanks to P for a forensic accounting redo/confirmation of the original figures (which moved them by a few hundred pounds).
Either because of the specific anti-avoidance rule in the REIT legislation or because of the general anti-abuse rule (GAAR). This announcement suggests that there may have been an attempt to technically meet the requirements, notwithstanding that the shareholders were all connected to Mr Tice, rather than an actual attempt to find genuine outside investors ↩︎
The accounts show that almost all the profits were property rental profits – see the “expected tax charge” line in the tax reconciliation. The accounts also explicitly disclose property income distributions of 12.75p per share for FY2019, 10.43p for FY2020, 6.99p for FY2021, and 0.00p for FY2022, as well as some much smaller ordinary dividends. After we published the first version of this report, we fully reconciled our conclusions with the declared PIDs; that has very slightly changed the numbers (a few hundred pounds). ↩︎
The cash flow statement does show £36,150 of “Income taxes paid” but that’s too small to be the tax that should have been withheld; we expect it was another item (the most common cause of REITs having a tax liability is failure to distribute 90% of their property rental profits, but there are several other ways tax can arise). Withholding tax could also be included in the “dividends paid” line, but the figures here are the same as the cash dividends (and so zero in 2020); there is no sign here either of any tax. ↩︎
If that results in double taxation, then it is possible (but far from certain) that HMRC would in practice not collect the tax (as that would result in economic double taxation); we expect that HMRC would still apply penalties. ↩︎
The original version of this report said that the usual penalties regime applied, meaning probably 15%. However that is likely incorrect; there is no specific tax-geared or daily penalty that applies to a failure to withhold tax. The position is probably that if Quidnet filed an incorrect CT61 then penalties are limited to £300 per return, or £3,000 per return if it was careless. So plausibly £15,000 overall. If, on the other hand, Quidnet did not file CT61s at all then the penalty is probably limited to £300 per return, so £1,500 overall. Daily penalties only start to run after notification from HMRC. This is a curious result and at some point it would make sense to bring withholding tax penalties in line with the usual penalty rules. ↩︎
The remaining shareholders were RJS Tice Family SIPP (36.04%), and NJG Tribe SIPP (1.75%) and three UK companies: Tisun One Ltd (9.21%), Tisun Two Ltd (9.19%), Tisun Three Ltd (9.19%). Another company, Tisun Four Ltd, was incorporated on 11 September 2020 and subscribed for 238,233 Quidnet ordinary shares on 21 September 2020, giving it about 3.38% of Quidnet by the July 2021 confirmation statement. ↩︎
The shareholder then gets a credit for the tax withheld, so overall the right amount of tax is paid, and the withholding tax is really just an advance payment. ↩︎
The authority for this is s973(3A) ITA 2007, which applies the usual rule that the cash value of a scrip dividend is treated as its “amount” for tax purposes. So when we apply the withholding rules, instead of withholding some shares and giving them to HMRC, the requirement is to hold a cash amount. That is by contradistinction with the “funding bond” rules, which (in a different context to a REIT) can require securities to be withheld and handed over to HMRC. ↩︎
These and other corporate announcements can be found on the Channel Islands stock exchange (The International Stock Exchange) website. ↩︎
If 20% had been withheld from the non-exempt shareholders (Tice 15.36% + trust 19.26% = 34.62% of the total), only ~393,700 shares should have been issued instead of 423,040. The difference of ~29,300 shares at £1.617 = ~£47,400. ↩︎
We can go further by reconciling share figures from the confirmation statements filed with Companies House, i.e. starting with share ownership figures in the July 2019 confirmation statement and adding in the shares that would have been received if tax had not been withheld; that equals the holdings we see in later confirmation statements. This confirms that Mr Tice and the trust received the gross number of shares – more on that below in the footnote to the second dividend. ↩︎
A further 567,051 shares were issued as new equity to fund a property acquisition. ↩︎
Perhaps the announcement was just sloppily worded and in fact tax was withheld and Mr Tice and the trust received 80% of the stated numbers? We can eliminate that possibility by looking at the change in Mr Tice’s shareholding from the July 2019 confirmation (when he held 824,100 shares) to the July 2021 confirmation (when he held 917,728 shares). That’s a difference of 93,628: exactly equal to the 64,967 shares he received for dividend 1 plus the 28,661 shares he received for dividend 2. So it’s clear that the shares were issued without any withholding. ↩︎
The announcement says that the option to subscribe was offered to shareholders who were directors or employees of the company; we believe this was loose wording and that Mr Tice’s trust also had this opportunity. Our reconciliation of share subscriptions shows that the trust did in fact subscribe for the shares. ↩︎
The accounts disclose FY2020 Property Income Distributions of 10.43p per share. Since the H1 2020 interim was 5p (entirely a PID), the PID element of this 6p final dividend was 5.43p, with the remaining 0.57p being an ordinary (non-PID) dividend not subject to withholding. We picked this up when, after publication, we reconciled our conclusions with the PID figures in the accounts. That results in slightly lower tax on this dividend, but slightly higher tax on the last dividend, with overall a change of just a few hundred pounds. ↩︎
Because his July 2021 shareholding of 917,728 is exactly explained by his original 824,100 shares plus the two 2020 pro-rata scrip allotments (64,967 + 28,661 = 917,728). He therefore received no new shares from this dividend. ↩︎
The RJS Tice Family Settlement’s holding increased by approximately 40,145 shares between the end of the H1 2020 interim dividend and the July 2021 confirmation statement — precisely matching scrip at the £1.602 issue price; i.e. no shares/tax were withheld. ↩︎
There is a small amount “missing” here. The trust had compounded its holdings to roughly 1,151,028 shares by this point, so a 6p per share dividend means it was actually entitled to a gross dividend of around £69,060. This implies the trust either took the remaining ~£4,760 in cash or there is a source of error we are missing. That’s not clear – so we will conservatively assume there was no cash dividend. ↩︎
The scrip shares (140,304 × £1.602 = £224,767) plus the cash (£168,246) total £393,013 — almost the same as the gross dividend of 6p × 6,542,911 shares = £392,575. ↩︎
It looks like Quidnet failed to file correct confirmation statements for 2022 and 2023, as they show no changes in shareholdings, but the July 2024 confirmation statement shows the trust holding 1,231,784 shares – i.e. a difference of 40,611 shares. ↩︎
We initially estimated it with a simple day-count; but we’ve now reconciled all the dividend numbers in the accounts and can be confident of the correct, higher, figure. ↩︎
Mr Tice’s holdings at this point were 917,728 shares. So 917,728 x 1.49p = £13,674. ↩︎
The trust’s holding at this point was 1,231,784 shares. So 1,231,784 x 1.49p = £18,354. ↩︎
The cashflow statement on page 14 of the 2022 accounts shows £69,095 of tax paid in 2022. That is almost exactly the same as the £69,098 of corporation tax shown on page 19. We conclude that no tax was deducted from dividends in 2022. ↩︎
Updated 3.45pm on 7 April 2026 with Welcome Accountancy’s legal threat.
The internet is full of peoplepromising effortless tax refunds. For many, the business model is simple: invent expenses, file claims at volume, and take a cut. These “refund factories” exploit HMRC’s “process now, check later” systems, operating largely out of sight – but at a scale that may represent a material slice of the UK’s £47bn tax gap.
It is rare to see exactly how these schemes operate. Usually they remain hidden from view until a tax tribunal decision exposes what was done and how the claims were fabricated.
Until recently, the most notorious example was Apostle Accounting Ltd, the failed firm run by high-profile adviser Zoe Goodchild. A Tribunal last year found that Apostle had deliberately submitted a false tax return – and that Goodchild had reported her client to the police when he complained. This was no isolated incident – it’s been reported that Apostle made more than 800 false returns, shielded by vexatious criminal complaints.1
A reported case2 last week reveals another firm submitting fake tax refund claims – Oxford-based Welcome Accountancy.3
The current regulatory framework is visibly failing to stop firms like Welcome and Apostle. While new rules coming into force this year are intended to curb the abuse, there is a real risk they will miss the mark – imposing administrative burdens on normal advisers, while the fraudsters simply find a new workaround. We believe a better answer is aggressive enforcement, and the use of the criminal law. Bad actors will only stop when the personal risks outweigh the rewards.
The false claim
Yasir Badoume was an employee, paying tax on his employment income under PAYE. Employees can only claim a tax deduction for expenses in very limited cases. That, however, didn’t stop Welcome Accountancy Services.
In January 2020, Mr Badoume authorised Welcome Accountancy Services to act as his agent. Welcome then submitted tax returns for six tax years, claiming tax refunds for employment expenses. The refund claims were very large – in 2021-22 they claimed expenses of over £21,000 against income of £88,247, for supposed travel expenses, professional fees, other expenses and capital allowances.
This was implausible on its face. Employees don’t claim capital allowances.4
It was, however, initially successful: the returns generated tax repayments, made to Welcome Accountancy Services. We don’t know what proportion, if any, were paid to the actual taxpayer, Mr Badoume.5
This is often the problem with tax refunds – HMRC often grants the refunds automatically (sometimes instantly) and only checks them later. That is convenient for normal taxpayers making a genuine correction and refund claim; but it opens the door to bad actors.
In this case, HMRC opened an enquiry within the statutory deadline (a year from submission of the return) and assessed additional tax. Welcome Accountancy appealed, with the matter reaching a Tribunal last month.
More than negligence or incompetence
It is not a criminal offence to make a mistake preparing a tax return, even if the adviser is negligent or incompetent. This case, however, appeared rather more than a mistake.
When HMRC opened an enquiry into Mr Badoume’s tax return, they received this explanation from Mr Omar Ali, a partner at Welcome:
“By UK tax laws 20 percent of expenses6 paid by taxpayer are allowed to be claimed but if and where expenses are excessive, please amend the figures.”
As the Tribunal said, this is an “utterly false premise”. Indeed the Tribunal thought the suggestion was “so implausible” – particularly coming from a firm describing itself as certified chartered accountants – that it did not believe anyone at Welcome genuinely thought it was permissible.7
The Tribunal also noted the invitation to HMRC to “amend the figures” if they seemed excessive. As the Tribunal observed, “To a reasonable reader, this suggests that the representative himself had little confidence in the accuracy of the figures previously provided”.8
When asked for supporting evidence, Welcome said it had shredded the taxpayer’s records after six months due to storage constraints. The Tribunal did not believe this:
“We do not accept that records were shredded after six months because we do not believe that there were ever any records to shred; the expense claims were, in our view, a figment of the imagination of whoever at Welcome Accountancy Services completed the Appellant’s tax returns.”
Despite initially claiming the records had been destroyed, Welcome subsequently produced 30 receipts and a travel schedule for part of the 2021-22 year. But HMRC checked the vehicle’s MOT records, and the numbers did not add up:
Welcome’s schedule claimed 13,718 miles of business travel in just eight months of the 2021-22 tax year.
The vehicle’s actual total mileage for the entire year, per MOT records, was only 10,700 miles – and that would include non-business travel.
The Tribunal concluded that the travel schedule “was prepared in order to fit in with the receipts previously provided and the travel expense claim previously made rather than to accord with any reality”.9
A subsequent email from Welcome asserted that HMRC officers had said 20% of income could be claimed as expenses, and accused HMRC of racial targeting. A “senior accountant” at Welcome continued this theme, writing that “This is a racial issue as my practice has been targeted on prejudice basis and I have clear proof of that and I am awaiting full reply from The Chief Executive.”
Welcome then failed to defend their position. There was “almost zero engagement” with the Tribunal. No skeleton argument or witness statement was filed. Neither the appellant nor Welcome attended the hearing.
The Tribunal concluded that Welcome knowingly submitted inaccurate tax returns:
This doesn’t appear to have stopped Welcome Accountancy. The Tribunal said that the firm described itself as “Welcome Accountancy Certified Accountants”, but found nothing in the correspondence to suggest it was actually recognised by the Association of Chartered Certified Accountants. It referred the decision to the ACCA for investigation.11
Welcome Accountancy’s website says its staff are all chartered or training to become chartered. We don’t know if this is true – we asked the firm what their regulatory status was, but didn’t receive a response.
Evidence of fraud
The Tribunal held that the loss of tax was intentional. It follows that, if Welcome Accountancy acted dishonestly, then a criminal offence may12 have been committed, either a specific statutory tax offence or the common law offence of “cheating the revenue“.
Mr Badoume may also have been defrauded, given Welcome had represented that they were providing a genuine tax advisory service but (on the Tribunal’s findings) actually knew they were fabricating claims, and that their actions would cause Mr Badoume a financial loss.13 Again this will turn on whether Welcome acted dishonestly.
Was this a one-off?
It seems not.
The Tribunal says that Welcome filed a complaint covering what looked like eighteen similar cases. If we assume all eighteen had similar claims to Mr Badoume, that implies over £500,000 of lost tax.
A normal firm would not have eighteen cases like this – or even one.14 And if this were some freak one-off, perhaps the work of a rogue employee, Welcome’s response makes little sense: rather than treating the claim as an error, it defended it, advanced an invented “20%” rule, and persisted when challenged (including making an entirely spurious accusation of racism). The natural inference is that these were not isolated fabrications but part of a broader practice. If so, the 18 cases may simply be the number HMRC’s normal processes happened to uncover, rather than the full extent of the false claims Welcome submitted.
The consequence for Welcome Accountancy
In the few cases where firms like Welcome Accountancy have been caught, the people behind the firms seem to just walk away – leaving the clients with no recourse. Even when HMRC commences a fraud investigation, the usual response is to file for insolvency and start up again with another company.
Our view is that the best answer isn’t regulation – which puts a burden on compliant businesses and is ignored by bad actors – but effective enforcement.
That’s what’s required in this case – and we expect HMRC’s Fraud Investigation Service is already investigating Welcome Accountancy.
As the Tribunal noted, it is unclear quite whether Mr Badoume is a victim or a participant. The Tribunal concluded that the fact Welcome Accountancy had Mr Badoume’s national insurance number means he probably knew the claims were being made; that may be, but it is also possible he is completely unaware of the tax refunds made in his name.
The new regulation
Today, anyone can call themselves a tax adviser, and start filing tax returns and refund claims on behalf of clients. That will change in May 2026 following the enactment of Finance Act 2026. Tax advisory firms will have to start registering with HMRC, or they won’t be able to file tax returns on behalf of clients. Ellen Milner, director of public policy at the CIOT, has written an excellent article on the new “almost regulation” of tax advice.
We share Ellen’s scepticism. And there’s an obvious response: we expect some bad actors will start using their client’s own log-in details to file tax returns as if they were the client – therefore making the rogue firm invisible to HMRC. In the US, firms that do this are referred to as “ghost” tax preparers. 15
And HMRC get a separate line of attack if they can show that a firm is acting intentionally to bring about a loss of tax for HMRC. Under the new “sanctionable conduct” rules HMRC has powers to request client files and, ultimately, assess penalties of up to 100% of the tax that was lost.
In principle these rules should enable HMRC to aggressively police rogue firms like Welcome Accountancy, without the time, cost and risk of a criminal prosecution. The practical question is whether HMRC will have the resources and willingness to do this.
We would suggest one simple step to deter ghost preparers: large civil penalties for any adviser that uses a taxpayer’s own log-in credentials to file a tax return, with the penalties applying to the individual filing the return and others responsible. There should be no need to prove dishonesty, or anything beyond the simple fact that the adviser accessed the taxpayer’s own account in the course of the adviser’s business.17 Right now this behaviour isn’t even forbidden: it should be.18
But the more important step is aggressive and effective enforcement. When there’s reason to believe that fraud is being committed, the HMRC response shouldn’t be exchanges of correspondence and tax tribunal hearings – it should be dawn raids, and arrests.
Welcome Accountancy’s response
We called the telephone number on Welcome Accountancy’s website to establish that this was the correct firm, and then sent an email asking for comment. They seemed keen to speak in person; but (as is our normal practice) we asked for a response in writing. We didn’t receive one prior to publication.
Here’s the correspondence:
After publication we wrote to Welcome Accountancy again, and said we’d correct any factual or legal errors. They responded – not to identify any errors, but to say that the case is still ongoing (as if they were unaware of the judgment). They said they’d take legal action if we didn’t take down the article within 24 hours, but that’s very hard to take seriously:
And then another email, making the perplexing claim that they are “taking the matter to tribunal”:
Many thanks to T and M for drawing our attention to this case, and to M and P for additional research on this article.
Footnotes
At one point there was a fraud investigation into Ms Goodchild; we don’t know its current status. Apostle was was fined £40,000 by its professional body, the Institute of Certified Bookkeepers (ICB), for anti-money laundering failings. Goodchild’s successor firm, Innovate Accounting, successfully applied for membership of another professional body, the Institute of Accountants and Bookkeepers (IAB). The IAB excluded her in March 2026 following accusations of misconduct and dishonesty. ↩︎
Badoume v HMRC [2026] UKFTT 484 (TC). The hearing was on 23 March 2026 at Taylor House, London, before Tribunal Judge Keith Gordon and Member John Woodman. Judgment was released on 27 March 2026 – a notable achievement by the judges. ↩︎
That’s a slight over-simplification. In principle there are rare cases where an employee can claim, for example if the employer insists the employee purchases plant/machinery to carry out their job – but none of our team is aware of a case where this has happened. ↩︎
Paragraph 23: “The tax overpayments claimed on the returns were duly repaid. In accordance with the instructions on the tax returns, those repayments were made to Welcome Accountancy Services.” ↩︎
This appears to be a typo by Welcome Accountancy; they surely meant “income”. ↩︎
And, as the Tribunal noted, if Welcome Accountancy really believed there was a 20% rule, they would have simply claimed 20%, and not divided the claim between three categories, with fictional stated expenditures. ↩︎
The rules governing deductions for employee expenses are, as the Tribunal noted, “notoriously rigid, narrow and restricted in their operation”. It would be surprising for an employee’s deductible expenses to amount to 2% of their income; 20% is not credible. ↩︎
Paragraph 96(5)(b). The Tribunal also noted that many of the claimed journeys were one-way only, with no return leg — inconsistent with any plausible travel pattern. ↩︎
Enforcement takes the rather expensive route of the ICAEW applying for an injunction. It’s an offence to hold yourself out as a solicitor or barrister, but the term “accountant” is not protected by statute, only by private tort actions. There have been calls in the past for this to change. ↩︎
Paragraph 45 of the judgment: the Tribunal found the firm’s conduct to be “sufficiently concerning to merit our sending a copy of this decision to the Association for their investigation”. ↩︎
We say “may” because the Tribunal was applying the civil standard; any prosecution would of course have to establish guilt beyond reasonable doubt. ↩︎
Not the loss of the expenses claim, as he was never entitled to an expenses claim, but the loss of fees, and potentially penalties. ↩︎
Of course it’s possible that the eighteen were under enquiry for “normal” reasons and not because of fictitious expenses, and this was indeed a one-off. However it’s our opinion, based on our team’s experience of similar cases, the facts of this case and Welcome’s response, that it is more likely that this was not a one-off. ↩︎
Ghost filings have already been seen in the context of R&D tax relief. HMRC started blocking/investigating R&D tax relief claims by suspect firms, and those firms started avoiding this by filing directly, using their clients’ log-in details. ↩︎
It’s not explicit in the legislation, but in our view it’s reasonably clear that the £5k/£10k fine is for each incident of non-compliance, and not a flat £5k/£10k per firm. ↩︎
i.e. the rule wouldn’t apply to amateurs or professionals helping someone out as a favour. ↩︎
It would be sensible and fair to add a prominent warning at the point of logging-in. ↩︎
MP Estate Planning1 is an unregulated advisory firm using an extensive socialmedia campaign to sell expensive “asset protection trusts” to elderly homeowners, often of relatively modest means.
The pitch is simple: put your home into a trust and you can avoid inheritance tax, care home fees, divorce claims and creditors. Our investigation, drawing on the expertise of over a dozen specialist lawyers and tax advisers, found that the claims are false – and may leave families facing large tax bills and, ultimately, cause a complex and expensive probate process.
We were disappointed but not surprised to find trusts being missold – that’s been going on for years. What we found was much worse – a firm that operates on the edge of legality, and may step over the line. A series of misrepresentations as to what it is and what it does, and advice to clients that goes beyond “merely wrong” into shocking negligence. And when we asked MP Estate Planning for comment, they failed to provide any response to our technical criticisms, and provided answers to other points that we consider to have been intentionally misleading.
The length of this report reflects the seriousness of what our investigation found.
The problems with MP Estate Planning
It all starts with a lack of expertise. The firm’s founder, Mike Pugh, says he is an “estate planning lawyer”. He isn’t. The firm’s website says it employs “experienced lawyers”. That is also untrue. We believe nobody at MP Estate Planning has any legal, tax or accounting qualifications.
The lack of expertise doesn’t stop the firm marketing its business very aggressively. It has over 400 videos on social media pushing an alarmist message: “if you own anything, it can be taken from you”. Pugh says their mission is “quite literally to save the middle class from being completely wiped out in the UK”. The solution is simple: “every home in a trust” – and they’re pushing this proposition to elderly people with assets of as little as £150,000:
The firm’s videos and website make a variety of striking claims:
You put your house and other assets in trust. They’re then outside your estate for inheritance tax purposes.
There are no adverse tax consequences of this.
The trust will reduce probate costs.
Your house won’t be assessed in determining whether you have to contribute towards care home fees (should they be needed).
You can financially support your children after you die, but if they divorce then their spouse will have no claim on their assets.
Assets in the trust are safe from your creditors, and can’t be touched if you go bankrupt.
All these claims are false. The Society of Will Writers has published guidance telling its members not to make these kinds of claims. The Association of Lifetime Lawyers has published a report demonstrating the damage caused by unregulated providers making claims like this.
Our investigation uncovered multiple serious problems with MP Estate Planning’s claims and business practices.
Lifetime trusts are poor tax planning for most people. They often result in more inheritance tax because the spouse exemption and residence nil rate bands aren’t available to trusts.
The MP Estate Planning structures we reviewed have no material tax benefit and likely trigger a series of unnecessary tax bills.
One experienced adviser told us that the tax claims made by MP Estate Planning were so egregiously bad that they looked like fraud (although most of our team believe the firm is just unqualified and reckless).2
They publish hundreds of videos which include multiple legal errors, often referring to US law concepts that have no equivalent in the UK. Their website is full of false claims and appears to be largely AI generated.
The firm claims the backing of an eminent KC, James Kessler, who told us he’s never given it, and in fact told MP Estate Planning to stop using his name.
MP Estate Planning claim their “head of legal”, and Mike Pugh’s mentor, is Dr Paul Hutchinson, who “trained with Kessler for 20 years”. In fact MP Estate Planning have never had a “head of legal”, or indeed any legally qualified staff at all. Dr Hutchinson told us he has never met Mr Kessler, and has never had any dealings with MP Estate Planning.
It appears that the firm is drafting property trusts for its clients, despite not employing qualified lawyers. If so, that’s potentially a criminal offence. And we’ve seen trust deeds that include very basic but highly significant errors.
Mike Pugh’s previous firm, Maplebrook Wills Ltd, went bust owing £1.7m to HMRC – an extraordinarily large amount for a small will-writing business. Mike Pugh’s actions are currently being investigated by the company’s liquidator.
We therefore believe MP Estate Planning is misselling trusts to people who probably do not need them and who are unprepared for the legal and tax complexities these structures create. Bad inheritance tax planning usually remains hidden until the taxpayer dies, decades after the planning was put in place. It is the taxpayer’s grieving children who are then left to pick up the pieces.
A prominent Scottish law firm failed in 2021 after selling unsuitable “family protection trusts”. Its pitch was similar to MP Estate Planning – but at least it was regulated, and so its clients had the prospect of recovering their loss. MP Estate Planning is completely unregulated, and anyone let down by its trusts will have no recourse at all.
We will be referring the firm to the Solicitors Regulation Authority for carrying on reserved legal activities without authorisation. We hope that HMRC investigates the firm for failing to disclose tax avoidance schemes.
Technical terms in this article
Trust
A legal arrangement where the legal ownership of assets (held by trustees) is separated from the beneficial ownership (those entitled to benefit).
A trust where the settlor (or their spouse/civil partner) can still benefit from the trust assets. This has major tax implications, such as the denial of certain tax reliefs.
An anti-avoidance rule where someone gives away an asset but continues to benefit from it (like giving away a house but still living in it). For inheritance tax purposes, the asset remains in their estate.
A tax on the profit when you sell or dispose of an asset that has increased in value. Transfers into trusts often count as a disposal for CGT purposes.
A tax relief that allows the deferral of Capital Gains Tax when giving away certain assets (like business assets or transfers into trusts), passing the potential tax liability to the recipient.
When someone intentionally reduces their assets (e.g., by putting a house in a trust) to qualify for state-funded social care. Local authorities can assess them as if they still owned the assets.
Before we present the products sold by MP Estate Planning, and the reasons why they don’t work, there are numerous red flags that in our opinion indicate this is not a business to be trusted.
Deceptive claims about their expertise
Mike Pugh says he’s a “tax lawyer” and an “estate planning lawyer”:
He isn’t. Mike Pugh worked as a Will writer after emigrating from Canada to the UK. He set up MP Estate Planning in 2023, but has no UK legal, tax or accounting qualifications. It’s an offence to hold yourself out as a solicitor or barrister, but the term “lawyer” is not legally protected – we nevertheless regard it as highly misleading for someone with no legal qualifications to claim to be a lawyer.
The MP Estate Planning website said they are a firm of “experienced lawyers” – this is untrue. We can’t identify anyone at MP Estate Planning who has any legal, tax or accounting qualifications. Neither any of the staff nor the firm itself is regulated. When we asked MP Estate Planning about this we didn’t get a response; they just changed the website.
Here’s the, fairly typical, CV of one of their representatives: he worked in sales until nine months ago, and now claims to be an “estate planning consultant” who can “specialise in delivering advanced, compliant and highly tailored estate planning solutions”:
In reality he’s still working in sales, just with a different job title.
It takes three to five years to train to be a chartered accountant and two years to train to be a chartered tax adviser. MP Estate Planning tell their salespeople they can earn £20,000 per month after three weeks’ training. That would be less concerning if all they did was sales; but they tell potential clients they’re “consultants”, and we’ve seen multiple cases where the salespeople claim to be qualified to give advice.
Nobody else involved appears to have any relevant qualifications. Dan Irwin, MP Estate Planning’s “head of property” was previously a director of Safe Hands Plans Ltd, a pre-paid funeral plan business which collapsed in 2022, with 46,000 people losing most of their money. Two individuals who ran the business are currently being prosecutedforfraud. There is no suggestion Mr Irwin was involved in the fraud, and we don’t know if the fraud was underway when Mr Irwin ceased to be a director in April 2018.3
The website says they work with a solicitors firm called Feakes & Co – but the firm told us that, whilst they provide some “corporate advice” to MP Estate Planning, their role “does not include designing or drafting trust structures or other such documents for them or their clients”.
MP Estate Planning told us that “Where a client’s circumstances require specialist or regulated advice, we refer or signpost to appropriately qualified external professionals”. However, there’s no sign that the trust deeds we reviewed were drafted by an external firm – the only firm mentioned on them is Feakes & Co, apparently because they undertake trust registrations.
Here’s another example of how MP Estate Planning recruits sales personnel:
Our view is that a highly incentivised sales team operating with no tax/legal qualified staff is extremely dangerous.
Deceptive claims about their legal team
Mike Pugh describes his “head of legal” in numerous videos. There isn’t one. MP Estate Planning has never had a lawyer on its team:
We asked Pugh about this. He responded:
“You raise the point about references in video material to a “head of legal”. This refers to the involvement of legally trained professionals within the wider advisory ecosystem we work with, rather than suggesting a formal internal role that does not exist.”
That is a very unconvincing explanation of what we would characterise as a lie.
Mike Pugh often claims an association with James Kessler KC, often rated as one of the country’s leading private client advisers, and Dr Paul Hutchinson, a respected Will writer (with a PhD in Law), who appears to be the man he’s saying is his (non-existent) “head of legal”:
First video: “We use the Kessler 15th edition, James Kessler KC. I’ve actually had emails with him allowing me to use the precedents. He’s a lovely man. He’s the number one guy for taxes and trusts worldwide, period. I’ll just throw a shout out to my mentor, Dr. Paul Hutchinson, who I’ve worked closely with for 10 years. Paul trained under Kessler for 20 years. So we’re pretty comfortable with our technical capabilities.”
Second video: “At MP Estate Planning UK, our head of legal is a doctor of law specialising in taxes and trusts.”
Mr Kessler is the lead author of a well known practitioners’ textbook on Wills and trusts, which includes trust and Will precedents. He has never met Dr Hutchinson, much less trained him for 20 years. The claim that MP Estate Planning had some kind of special permission to use the precedents is false – and that plus other uses of his name sufficiently alarmed Mr Kessler that he includes a warning on his website:
MP Estate Planning (UK)
This company have been marketing themselves as Kessler Will UK and as providing “Kessler Wills”. This has been done without James’ permission.
James has no association with this company. He does not endorse this company or any of their so-called “Kessler Wills”. He does not vouch for any product offered by this company.
On 10 November 2025 the company has, through its directors, entered into formal undertakings including not to use or refer to the name Kessler and/or to use or refer to “Kessler Wills”.
If anyone is aware of them using the name Kessler or the phrase “Kessler Will”, or holding themselves out as being associated or endorsed by James, please let us know at the email address on this website
In all cases, James strongly recommends you take advice only from solicitors or accountants who are qualified and regulated.
Dr Hutchinson told us he used to provide in-house training for Pugh’s previous firm Maplebrook Wills. He lent the firm some money, and became a shareholder to try to recover it – but then Maplebrook Wills went bust and he was never repaid. He says he’s had nothing to do with Mr Pugh since:
I wish to have no association with Mr Pugh or his company and do not consider myself his mentor… for the record I have never met Mr Kessler let alone “trained under him”. I have his texts as reference material, but that is it.”
We can’t find any evidence that MP Estate Planning has a “head of legal”, but it certainly isn’t Dr Hutchinson.
MP Estate Planning continued pushing out marketing containing falsehoods even when they knew this report was about to be released. This was sent to their mailing list the day before we published:
Every senior politician does not have a trust. Trusts are poor tax planning for most people. So it is therefore unsurprising that the List of Ministers’ Interests and the Register of Members’ Interests show only a small number of politicians declaring family trusts. We cannot know for sure, but we are very sceptical that MP Estate Planning has any senior politician as a client.
These claims – particularly the “head of legal” and “trained under Kessler for 20 years” were more than slips of the tongue, or the typical exaggeration of a salesman. They were concrete claims, made repeatedly. Mr Pugh surely knew the claims were was false. It is not far-fetched to suggest that a criminal offence may have been committed here.4
A deceptive website
The MP Estate Planning website has several elements we regard as deceptive.
First, the claimed associations and awards are untrue and misleading.
We spoke to the Chartered Insurance Institute. They’ve never heard of Mike Pugh or MP Estate Planning, and neither are members of (or have any association) with the Chartered Insurance Institute.
Pugh told us:
Some of our colleagues are members or graduates of the Chartered Insurance Institute include Mr Zubair Abad.
There is no formal relationship with the Institute itself. We have amended the wording on our website to more accurately reflect this.
Zubair Abad does not appear to be a member of the CII. It is possible he has CII qualifications. The wording on the website now says MP Estate Planning is “Aligned with or members of” the CII and other organisations. That still seems to us to be misleading.
Second, the claimed award from “Legal Directorate” was phony. Legal Directorate is a “pay for play” directory which uses AI to generate fake reviews and fake awards, with listings of “best firms” that (with respect to the firms listed) are not credible:
At some point someone paid for an entry/award for Mike Pugh’s old firm, Maplebrook Wills. When he set up MP Estate Planning Ltd, it “inherited” the fake award, but Legal Directorate never changed the url – it’s still “https://legaldirectorate.co.uk/company/maplebrook-wills-441174401555-weston-super-mare/“, with reviews that are likely fake/AI generated.5
Since we asked about this, the “Legal Directorate” badge disappeared from the MP Estate Planning website.
Poor understanding of English law and UK tax
The MP Estate Planning videos and websites show a very limited understanding of UK tax and the English6 law of trusts. Here’s Mike Pugh last month:
“Never transfer your assets into your kids’ names, especially real estate. Here’s why.
Let’s say you bought a home many years ago for £300,000, and now it’s worth £900,000.
If you transfer or dispose of the property, you could trigger a capital gains charge, and your children might be responsible for paying a charge on the £600,000 of gain.
There are workarounds. For example, if your children move in and live with you, then you may be able to transfer the property to them without triggering the capital gains tax, as long as you continue to qualify for the main residence relief or private residence relief.
An easier solution than living together is to set up a trust and put your house into the trust and name your adult children as trustees and beneficiaries.
If you want to protect your home and see it safely get to your kids, click on the link in the description to watch my free master class on how to put assets into trust in the UK.”
This is nonsense from start to finish. If it’s your home, then the main residence exemption usually applies – so there’s no capital gains tax if you give the property to your kids. If it wasn’t your main residence then there would be CGT, but on you and not your kids. Having the children live with you wouldn’t change the result in any way.
When we wrote to MP Estate Planning for comment in advance of publication (see below), their explanation for this video was that “the editing of the short-form clip conveyed the point poorly and could lead to confusion”. This is not credible. The statements above are complete propositions expressed in full sentences; they are not the product of an ambiguous or misleading edit. We put this to Mr Pugh; we didn’t receive a response.
It is hard to see any explanation for this video other than that Mr Pugh had no understanding of basic UK tax principles.
A series of errors
There are other basic errors and false claims in the many videos published by MP Estate Planning.
A video on cryptocurrency claims “certain reforms by the Labour Party may lead to increased tax guidelines on digital assets. This could impact how they are taxed during transfers and inheritances” – but there are no planned or announced changes to the UK tax treatment of cryptocurrency.
There are lots of small errors like this that we regard as “tells” – signs that Pugh and his colleagues don’t understand their subject. Then there are some very large errors – the firm seems to believe that English law is similar to US law, when it very much is not.
Confusion between UK tax and US tax
Mike Pugh frequently talks about “revocable trusts” and “irrevocable trusts”. These are US tax terms, which no competent UK adviser would use:
This isn’t a one-off. Multiple videos on MP Estate Planning’s YouTube channel, and dozens of pages on their website, discuss revocable and irrevocable trusts. In this video, Pugh claims that revocable trusts avoid probate and are “commonly used in estate planning”. They do not and they are not. Indeed American citizens who move to the UK are usually advised to terminate revocable trusts, because of the uncertainty as to how the UK system characterises them:
In this video, Pugh says that “revocable and irrevocable is more to do with tax status” and that you can “close” an irrevocable trust with an “advancement of the trust period”. None of this has any meaning in English law.
And this, from “frequently asked questions” on the MP Estate Planning website, suggests the firm is actually setting up “revocable trusts” for their clients:
We asked MP Estate Planning about this. Mike Pugh told us:
“You have identified instances where legacy or internationally sourced educational material has used terminology more commonly associated with US trust law.
Where those terms have appeared on UK-facing pages, we agree that they are not the correct terminology for English law and we are reviewing and updating older content accordingly.”
This appears to be untrue. This wasn’t “legacy or internationally sourced material”. It was Mike Pugh speaking in their own videos, for a UK audience, mixing up UK and US concepts in the same video.
A website full of “AI slop”
The MP Estate Planning website has hundreds of pages containing false claims about English law and UK tax:
This page says the first step of probate is to submit the Will to a probate court. There is no “probate court” in the UK – you apply for probate using a form or online. Courts only become involved in contested cases. A dozenpages on the MP Estate Planning website used to refer to probate court, in the context of UK probate. Since we wrote to MP Estate Planning, these have been changed.
A page on “asset protection trusts” says that life interest trusts and interest in possession trusts don’t trigger immediate inheritance tax charges – that is incorrect.
This page on “settlor interested trusts” is extremely lengthy, and long on generic waffle (“settlor interested trusts occupy a distinct position, offering flexibility and control.”) but its list of tax issues omits the key point that a settlor interested trust is usually something that tax planning tries to avoid because the trust settlor remains taxable on trust income, and it’s a gift with reservation.
This page on “how to put your house in a trust in the UK” discussed using a “revocable trust” – but that’s a US concept that has no equivalent in English law or UK tax law. Multiplepages discuss “revocable trusts”. Since we wrote to MP Estate Planning, they’ve been rewritten.
Similarly, multiple pages discuss the concept of an “attorney-in-fact”. It’s not a concept in English law.
This page about deeds of variation goes on for pages, talks about “gift tax” and repeats meaningless phrases like “several notable cases in UK law highlight the importance of Deed of Variation regulations” (there are no such regulations).
A page on “Preventing Nursing Home Takeover” said “Options for funding care and government support, like Medicaid, might be available”. Medicaid is a US programme that can cover medical costs for people on low income. It is, obviously, not available to anyone in the UK. The new page is fixed.
There are then many pages full of misinformation, many with little to do with tax or trusts. A page about dementia, for example, incorrectly describes the laws around incapacity, and includes an entirely invented quote attributed to the Alzheimer’s Society.
This page says that if a UK resident gifts assets to a spouse living abroad, they may need to report the gift to HMRC. There is no such rule.
There are over a thousand articles on various aspects of tax and trusts, and over three million words – and it’s full of errors. You can see a complete list here and here – note how the edit times are often only a minute apart (and you can also see, at the top of the second files, all the edits made after we approached MP Estate Planning in March 2026).
The obvious explanation: the website is mostly AI-generated – it’s what’s often called “AI slop“.
We expect the website was created in this way to maximise MP Estate Planning’s Google hits for people researching tax and trusts. It is, however, deeply irresponsible, because it’s providing people with false information.8
If an accounting or law firm behaved in this way then we expect there would be serious regulatory sanctions. MP Estate Planning, however, is entirely unregulated.
A mysterious business failure
MP Estate Planning is not Mike Pugh’s first Will writing venture. Before that, he incorporated a company called Maplebrook Wills Ltd in 2017. It provided similar services to MP Estate Planning, as well as selling a “franchise opportunity” to use its software, brand and templates in your own business.
Maplebrook Wills never appears to have had the success of MP Estate Planning. The business filed “micro-entity” accounts for 2019, 2020, and 2021. Its final filed accounts in 2021 showed total net assets of just £85,841. It then failed to file accounts for 2022, Pugh resigned as director (replaced by someone who appears to be his wife), and the company entered liquidation.
The liquidators’ initial 2023 statement of affairs made this look like a fairly ordinary small-company collapse: about £169,000 was owed to creditors, including about £78,000 to HMRC. But the later documents suggest there may be much more to the story.
Most strikingly, the liquidators’ 2025 report says that HMRC had now submitted a claim for £1,735,520. That is an astonishing figure for a small company. The report treats that claim as unsecured, not preferential. If so, that means it is not for VAT, or PAYE income tax or national insurance (which rank as secondary preferential debts in an insolvency). The £1.7m must, therefore, be something else – most likely corporation tax and/or very large HMRC penalties.
We don’t understand how so small a company could run up a £1.7m tax liability; to owe that much in standard corporation tax alone, a business would need to generate roughly £9 million in profit (and the accounts suggest this business’s profits were less than a tenth of that figure). Whatever the explanation, something appears to have gone badly wrong. And, at the same time, the preferential debts went up to £176,807.
The impression that something went very wrong is supported by the liquidator’s report that the director and bookkeeper have failed to cooperate with investigations into the company’s final trading period:
As previously reported, my statutory investigations into the company’s affairs remained ongoing. Creditors are aware that these investigations concern the movement of the company’s assets and liabilities since the last set of formal accounts was prepared, as well as transactions undertaken during the company’s final trading period.
Throughout the reporting period, I have continued to make extensive efforts to determine whether the transactions identified during the company’s final trading period were made in the ordinary course of business. I have also continued enquiries into the movement of assets and liabilities during the same period to ensure that such movements can be accurately accounted for.
Despite repeated requests issued to the director and the company’s bookkeeper, I have not received sufficient information to progress these enquiries.
Accordingly, following the period under review, I have formally instructed my Solicitors, Freeths LLP, to assist in obtaining the information required to advance my statutory investigations. Freeths LLP are currently reviewing the material available and will advise me on the appropriate next steps in due course.
I will provide creditors with a further update in my next report.
That is unusual language for what was supposedly a straightforward small-business failure. The liquidators are investigating transactions in the final trading period, movements in assets and liabilities after the last filed accounts, and have had to instruct solicitors because they say they have not received enough information from the director and the bookkeeper. That does not tell us what happened. But it does suggest the liquidators believe there are serious unanswered questions about the company’s affairs.
We can only speculate about the detail. One notable fact is that the Maplebrook franchise business appears to have been transferred to a new company, Maplebrook EDGE Network Ltd, incorporated before Maplebrook Wills Ltd went into insolvent liquidation. It is possible the liquidators are examining whether assets were moved out of the company for less than full value. But that is just a possibility.
This due diligence report from business intelligence firm Tech City Labs contains further information on MP Estate Planning, Maplebrook Wills, and other connected companies and individuals.9
Currently we have no explanation why a small company with roughly £90,000 of initial non-tax unsecured creditors should suddenly owe £1.7m to HMRC.
We asked Mike Pugh; he didn’t respond.
Accounts that make no sense
Here’s MP Estate Planning’s balance sheet for its first full year of trading, 2024:
The 2024 figures here bear no relation to the figures in the 2024 accounts:
Fixed Assets: The original 2024 accounts show £3,179. The 2024 comparative column in the 2025 accounts shows £209.
Current Assets: The original 2024 accounts report £410,277. The 2024 comparative in the 2025 accounts reports £267,565.
Creditors (due within one year): The original 2024 accounts list £404,280. The 2024 comparative in the 2025 accounts lists £153,548.
Total Net Assets/Equity: The original 2024 accounts state the company had £9,176 in net assets. The 2025 accounts state the 2024 net assets were £114,226.
This isn’t a rounding issue, formatting issue, or taxonomy issue. These are just fundamentally different numbers. The accounts weren’t restated, there’s no prior year adjustment, and no note explaining the reason for the changes.
We have no explanation for this.
The 2024 accounts were filed using the Companies House online service (probably by Mike Pugh or someone at MP Estate Planning). The 2025 accounts were filed using professional accountancy software by “LC Accounting”. We believe it’s this small firm in Somerset – we wrote to them asking for comment, but didn’t hear back.
The pitch and the reality
What is a trust?
MP Estate Planning, and many other unregulated firms, sell trusts as a magic box that makes your assets disappear from the taxman and your creditors. The reality is that trusts are much less mysterious, and much less able to achieve these objectives.
A trust is a legal arrangement for holding assets. The key idea is that legal ownership (whose name is on the title) can be separated from beneficial ownership (who is entitled to benefit).
Every trust has:
Trustees: the people (or a company) who hold the assets legally and make decisions. Trustees must act in the best interests of the beneficiaries and follow the trust deed. They can be personally liable if they get it wrong.
Beneficiaries: the people who can benefit from the trust (for example, by receiving income or capital, or by living in a property).
A settlor: the person who creates the trust and usually provides the assets.
A trust deed: the document setting out who the trustees and beneficiaries are, and what powers and rules apply.
Trusts are used for many legitimate reasons (for example, to manage assets for children, to provide for a vulnerable person, or to control how family wealth is distributed). But they come with real-world consequences: trustees have duties, paperwork and often ongoing administration.10
Diagram connections
Diagram connections
From Settlor to Trustees (Label: Transfers assets)
From Trustees to Trust Assets (Label: Legal Ownership)
From Trustees to Beneficiaries (Label: Beneficial Ownership)
Newspaper headlines often give the impression that trusts avoid tax. However, for most normal people, trusts are not good tax planning vehicles. Precisely because of their historic association with tax avoidance, successive Parliaments have built an extensive set of rules around them:
A gift into trust is a “chargeable lifetime transfer” – inheritance tax at 20%11 of the value of the property put into trust (after the £325k nil rate band).
The trust is then liable to an “anniversary charge” of up to 6% on its value (above £325k) every ten years.12
If you “give away” an asset but keep the benefit (for example, you keep living in your home rent-free), tax law will often treat you as still owning it, whatever labels are used in the documents.
You can be hit with a capital gains tax charge when you put assets into trust.
The trust itself is subject to capital gains tax and income tax, and its distributions to beneficiaries are also taxed.13
This is a very simplified summary of what is a very complex and frequently-changing set of rules.
The pitch
MP Estate Planning UK Ltd was founded by Mike Pugh, a Canadian who came to the UK in 2017. He claims to have a solution to “ALL THE MODERN THREATS”. Meaning: inheritance tax, care home fees, divorce and creditors:
Here’s a complete client proposal from MP Estate Planning:
There are four separate tax claims here:
You can put assets in trust but avoid the 20% entry charge and 6% anniversary charge.
You can give assets to your children but still live in your house, and avoid the “gift with reservation of benefit” (GROB) rules.
Another loophole lets you give your house to your children, and still live in it, thanks to a 1999 case.
And you can give your rental properties to your children, but get them to “gift” the rent back to you, so you still live off the income.
Our starting point is that lifetime trusts are poor tax planning for most people. They often result in more inheritance tax because the spouse exemption and residence nil rate bands aren’t available to trusts.
The MP Estate Planning structures we reviewed are, however, worse than that: they have no tax benefit and likely trigger a series of unnecessary tax bills.
In this video, Mike Pugh describes advising an elderly widow to put a £650,000 property in trust. That’s terrible advice – as he says, there is no inheritance tax benefit – but what he doesn’t say is that there will be up-front inheritance tax on the creation of the trust of £65,000.14 Putting the property in trust also results in the permanent loss of the residence nil rate band, which would have been worth up to £110,000 for her.15 And any future capital gain will be taxed in the trust – it wouldn’t have been if she’d retained ownership. This is a tax disaster – for which Pugh says he charged her £5,340.
One experienced adviser told us that the tax claims made by MP Estate Planning were so egregiously bad that they looked like fraud.16
The following sections look at each of these claims. We put our criticisms to MP Estate Planning and they told us they’d respond – they didn’t.
1. “Presto magic” to avoid the 6% anniversary charge
The inheritance tax changes in the 2024 Budget created a huge demand for inheritance tax planning. That’s caused an influx of unregulated firms offering inheritance tax solutions that are “too good to be true”.
MP Estate Planning’s pitch of “every home in a trust” has the immediate problem of the 20% entry charge and 6% anniversary charge every ten years, each on value over £325,000.
But Mike Pugh has a solution: trustees can simply shift the excess over £325k out of the trust and, “presto magic” there’s no tax to pay:
We’ve seen how they implement this:
This does not work:
An obvious point: all the claimed advantages of the trust: inheritance tax avoidance, protection against divorce and care home fees, are now limited to the first £325k of value. That’s pretty pointless, given that the first £325k of value is exempt from inheritance tax anyway.17 We expect most of MP Estate Planning’s clients have houses that are either worth more than that, or will likely be worth more than that in the foreseeable future.
It’s unclear how this is supposed to work as a practical matter; it’s even possible the trust is void for lack of certainty.18
The fact the settlor can receive back value from the trust means that it’s classified as a “settlor interested trust”, and so there’s an up-front capital gains tax charge on the disposal of the property to the trust (unless main residence relief applies). Hold-over relief is unavailable.19 Any income from the trust (for example rental income) is taxable in the hands of the parent/settlor.
When and if the value of the trust property exceeds £325k then the way the trust is drafted means there is a reallocation from Fund A to Fund B, and a transfer of beneficial ownership to the parent/settlor. That’s probably a capital gains tax disposal at market value. So any rise in value over £325k, even just as property prices rise over time, may trigger a 24% CGT charge (although how this would work in practice is not clear).20
One of the main purposes of the trust is to avoid the 6% anniversary inheritance tax charge. This is achieved by the Fund A and Fund B mechanism, which we regard as contrived and abnormal. MP Estate Planning promote this structure. It follows that MP Estate Planning had an obligation under the Disclosure Of Tax Avoidance Schemes rules to disclose the structure to HMRC. We understand that they did not.
This trust could well mean that the parents lose the main residence capital gains tax exemption (because they no longer own the house). That’s a serious tax downside which MP Estate Planning never mentions.
We discussed this structure with a leading tax KC – he said he thought the trust was “a poorly drafted mess and would cause more problems than it solved”.
You are perfectly entitled to do this if you are really making a gift. But if the gift is just on paper, and you continue to benefit from the property, then your “gift” is ignored for inheritance tax purpose thanks to the “gift with reservation of benefit” rules. The classic example is: I give my house to my children, but I continue to live in it. It’s a “gift with reservation of benefit” and disregarded.
MP Estate Planning say there’s an easy solution:
Mike Pugh is referring to the rule in section 102B(4)(a) Finance Act 1986 – it was introduced specifically for the situation where an adult child lives with a parent to look after them:
The key elements are that there is a gift of an undivided interest in land (e.g. “parent gives half the property to the child”), the donor and donee occupy the land and the donor doesn’t receive a benefit from the gift.
The first thing MP Estate Planning get wrong is that they don’t know what an undivided interest in land is. Here’s their attempt to create one:
One person cannot hold as “tenants in common”. It’s a hopeless failure to get within section 102B.
Even when they get that right, MP Estate Planning have a bizarre idea of what the word “occupy” means:
In other words, they think that a child will “occupy” the land for this purpose if they visit their parents occasionally, keep belongings in the house (such as a school uniform), and have access to the property and a key. That is contrary to the normal human meaning of “occupy”. Some advisers interpret the section as permitting children to live elsewhere primarily, provided they visit most weekends and holidays.212223 However MP Estate Planning’s view that you “occupy” a property if you visit it a few times a year goes far beyond anything our team has seen.
We therefore view this planning as well outside mainstream tax planning; we believe HMRC would challenge it if they became aware of it, and we don’t think the taxpayer would have any material prospect of success.24
MP Estate Planning suggest the planning is more effective if the child receives the gift and then lives with the parents. That is obviously correct – indeed the planning works if the child lives with the parents (and in our view that would continue to be the case if, for example, the children were at university but retained a bedroom at their parents’ house, and stayed there for some weekends and most holidays). However the problem is that children tend to leave, and at that point the reservation of benefit rules will apply.
We believe one of two things are happening. Either MP Estate Planning has misread “occupy” in s102B(4)(a) as “able or entitled to occupy” (the test in a preceding section), and don’t realise that section 102B(4)(a) requires actual occupation. Or this is an attempt to fool HMRC with a school uniform.
One experienced adviser described it to us as “utter nonsense”. Another, a tax KC with trusts tax expertise, said “it doesn’t look like they’ve read the legislation”.
There is a further even more obvious problem. We’ve seen a case where MP Estate Planning advised that the “occupy” strategy worked to prevent a gift with reservation of benefit where property was put in trust. It cannot. Section 102B(4)(a) requires that the “donee” occupy the property. When property is declared on trust then the “donee” is the trust, and a trust can’t occupy anything. This point is usually wellunderstood by advisers.25
3. Using a 1999 licence loophole that doesn’t exist
MP Estate Planning claim to have found another loophole, and one which has existed since 1999:
Mike Pugh is very vague here, but we’ve seen documents where Estate Planning claim that you can put your home into a trust, exclude yourself as a beneficiary, but still carry on living there under a “trustee licence”. They say this means there is no “gift with reservation of benefit”.
We saw an email to a prospective client in which an MP Estate Planning employee said:
“The design allows the settlor to retain occupation under a trustee licence, not a beneficial right — ensuring no ‘gift with reservation’…
No rent or benefit is reserved.”
This is a hopeless argument. The gift with reservation rules look at whether you have given away the property whilst still “enjoying” it. The legal form used – lease, licence, or anything else – is entirely irrelevant.
There is a straightforward, well‑known way to make a gift of a home effective while you keep living there: you pay the new owner a full market rent for the rest of your life. The legislation expressly allows for this.26 MP Estate Planning’s pitch is the opposite: they say there is a “trustee licence” and “no rent”. If that is what happens in real life, it is hard to see how the arrangement can be anything other than a reservation of benefit.
Quite aside from not working, the structure has the significant downside of losing the parents’ main residence capital gains tax exemption.
There may again be an obligation for MP Estate Planning to disclose the scheme to HMRC under DOTAS; we understand that they have not done so.
A tax KC we spoke to described MP Estate Planning’s approach as “baffling”, saying “I have no idea what they think this can achieve”.
4. Gifts that ignore an anti-avoidance rule
In principle it’s easy to avoid inheritance tax: just give your assets to your children. But there’s an obvious problem: most retired people who have assets live off the proceeds of the assets.
MP Estate Planning say you can have your cake and eat it: put rental properties into a trust, but still receive the rent from the properties:
The idea is simple: the trust mandates the rental income to the beneficiaries (the children) and they pay tax on it, and then give the money back to their parents.
And MP Estate Planning say that, as long as there’s no written agreement, it’s fine:
“If there is any hint that there is a written arrangement in place, the planning will potentially fall foul of the associated operations provisions (IHTA 1984 s268).”
This is very wrong.
The “associated operations” rules allow HMRC to treat a series of connected transactions and steps as a single arrangement when determining whether a transfer of value (like the gift of rental properties) has taken place.
Here’s the definition:
There is no requirement in the legislation, caselaw or HMRCguidance that the “operations” in question are in writing (and HMRC give an example in their guidance where successive gifts are subject to the rules).
In HMRC v Parry, the Supreme Court held that, applying Macpherson, the associated operations rules may apply if steps form part of and contribute to a scheme intended to confer a gratuitous benefit. Whether such a scheme exists is a question of fact, and may be established by evidence showing how the steps were intended to operate together; it does not require a formal written arrangement.
In this case there is clearly a scheme: the gift of the properties and the return of the income are clearly intended to operate together. This, after all, is what MP Estate Planning are selling. We therefore think it’s reasonably clear the “associated operations” rules will apply, so that for inheritance tax purposes the gift and the return of income would be analysed together as a single scheme.
The effect is that the arrangement must be analysed as a single scheme, so that (for inheritance tax purposes) the parents continue to benefit from the rental income. The ‘gift with reservation of benefit’ rules will, therefore, immediately bite. The consequence is that the full capital value of the properties will be treated as still belonging to the parents’ estate when they die, and heavily taxed. The structure therefore fails in a rather messy, entirely pointless, and highly expensive manner.28
High risk landlord tax planning
MP Estate Planning seems to be trying to move into general tax planning for landlords, and are adopting some planning that we would characterise as extremely high risk.
A slide from an MP Estate Planning podcast is suggesting that a landlord holding properties directly could form a partnership for a year, then incorporate the partnership, and have no capital gains tax or stamp duty:
The idea appears to be that the landlord first transfers their properties into a newly-created partnership – so, for example, if they own property with their spouse, the married couple are the partners in the partnership. They run that partnership briefly, and then transfer the partnership business to a company. The promoters claim that this avoids capital gains tax, stamp duty land tax and inheritance tax.
This planning is extremely high risk.
In principle a partnership can in some circumstances incorporate its real estate business without stamp duty land tax – but if there is a scheme of transactions to establish the partnership and then incorporate then the section 75A anti-avoidance rule means that SDLT will likely apply. If someone is obtaining the advice in this slide from MP Estates then it will be reasonably clear there was a prior arrangement. Waiting one year, or five years, makes no difference.2930
The capital gains tax planning could in principle succeed – there is potentially incorporation relief on the transfer of a business to a company. However it is a technical and difficult relief which normally requires the landlord to be carrying on a genuine property business, not merely holding investment properties, and can be hard to apply where the property is mortgaged. HMRC are scrutinising incorporation relief claims at the moment, and the law is about to change to require incorporation relief claims to be filed with HMRC.
We would suggest landlords carefully consider whether the tax and other benefits of incorporating justify the risk of high capital gains tax and stamp duty land tax charges. A competent tax adviser will always explain the level of risk and the worst case downside. When an adviser doesn’t do this, in our view it raises a large red flag.
Saving probate costs
Elderly people are often worried about the future costs of probate. Mike Pugh says they should be, and his trusts can solve the problem:
“By putting your largest asset into a trust, you can help to reduce future probate costs, as probate’s often geared on the size and complexity of the estate.
If your house doesn’t form part of the estate, it doesn’t form part of the price analysis.”
In our view the opposite is the case: the complexity caused by MP Estate Planning’s trusts will greatly add to the cost of probate. That would be the case even if the trusts were correctly structured and drafted – but they are not. We are aware of one case where the heirs of an MP Estate Planning client had to engage a KC at great cost to resolve the difficulties MP Estate Planning had caused.
The Society of Will Writers tells its members not to make this claim:
Divorce protection
MP Estate Planning heavily markets their trusts as a way that can financially support your children after you die, but if your children divorce then their spouse will have no claim on their assets:
“The divorce rate in the UK is 42%. What if your child gets a divorce? Your child’s future Mr. or Mrs. Wrong could walk out with half your life savings if your assets are not in a trust. Don’t leave money to children. Leave it to a trust. A trust will never get a divorce. A trust is the only thing we have that will make money stick to blood”.
We spoke to barristers and solicitors specialising in chancery law, family law, and nuptial agreements, and they all expected the trust would fail to achieve this.
Divorcing spouses have been successful in arguing that an ex-spouse’s ability to benefit from a trust is a matrimonial asset (even where it’s a discretionary trust) and should be part of the divorce settlement. Courts can and do make orders reallocating trust assets.
The decided cases have involved trusts where the trustees were genuinely independent, and beneficiaries could therefore argue that they weren’t necessarily going to have access to the trust assets. In the MP Estate Planning trusts we reviewed, the beneficiaries are also the trustees – the trusts are therefore highly vulnerable to attack in divorce proceedings. They’re simply part of the “property and other financial resources“31 of the child, and part of the “matrimonial pot” in the same way as any other asset. The arrangement achieves nothing.32
The courts often don’t need to award trust assets to a spouse – they can simply adjust the allocation of other assets to reflect the expected value of a trust interest (although this “judicial encouragement” doctrine has limits).
The Society of Will Writers tells its members not to make this claim:
Bankruptcy protection
Mike Pugh warns elderly clients that if they’re sued, they could become homeless:
He promises that trusts will protect your estate from insolvency (as well as divorce and care home fees; more on that below):
“ So what happens if you do not set up a trust?
Well, if you own anything, it can be taken from you.
If you don’t own it, it can’t be taken from you. And that’s what a trust does.
A trust removes you as the sole legal owner of an item. Therefore, you can’t lose it in a future divorce or to care fees or to taxes or litigation or bankruptcy.”
Similarly, their October 2025 proposal lists “Protection against future Bankruptcy” as one of the primary benefits of the “MP Estate Protection Plan”.
This is all variant of the “deed in the drawer” structure that’s been used for centuries. As one judge summarised it:
“The phenomenon of the “deed in the drawer” is one that is now frequently encountered. X appears to be the owner of a property, and people lend to him or otherwise deal with him on the footing that he owns it. But if X becomes bankrupt or the subject of enforcement proceedings a deed is produced which shows that in truth he holds the property upon trust for somebody else. In some cases these deeds are simply not authentic. In other cases they are authentic, but simply not noted in any public register.”
This is misleading. First, for almost all the elderly people MP Estate Planning are targeting, bankruptcy is not something they realistically should be worrying about (the bankruptcy of their children is a more reasonable concern; but that’s not the claim made in the above video).
Presenting bankruptcy as a “modern threat” is scaremongering. But if someone does go bankrupt, it is absolutely not the case that they “can’t lose” property if it’s in a trust:
Gifts into a trust will be set aside if made within two years of your bankruptcy, or five years if you were insolvent at the time.
A gift made at any time can be set aside if a court is satisfied that the gift was made for (amongst other things) the purpose33 of putting assets beyond the reach of a person who is making, or may at some time make, a claim against him. 34
Given the explicit marketing claims made by MP Estate Planning, it would be difficult to argue that protecting assets from creditors was not a primary purpose of setting up the trust.
The Society of Will Writers tells its members not to make this claim:
Care home costs
The rising cost of social care is a significant financial challenge for local authorities, and now accounts for 40% of all local authority spending. To try to control this, almost all local authorities only cover the cost of social care for people with assets of less than £23,250. It has been politically challenging to find a better solution. In the meantime, firms like MP Estate Planning market trusts as a solution to avoid having to pay for social care. The idea is to reduce your assets to below £23,250, or at least make sure your house never forms part of those assets.
There are rules in the Care Act which disregard any steps people take to avoid these rules by depriving themselves of assets. MP Estate Planning appears to have not read these rules.
In this video, Mike Pugh says people who’ve been diagnosed with a serious illness should put their property into trust, and that will stop local authorities assessing them to make a contribution if they later require long term care.
He for some reason starts talking about the Insolvency Act (which is irrelevant):
“So let’s remember that the CARE Act states that only if there’s a foreseeable need for care would you be crossing any lines…
…
Let’s clear up the misunderstandings around deliberate deprivation.
The deliberate deprivation stems from the Insolvency Act. It is criminal to try to hide assets from creditors. That’s a criminal offense.35 And so if you’re going to go bankrupt under the Insolvency Act, you’re not allowed to place assets into a trust.
Here, what we’re talking about, however, is a potential future care element. That means there are no creditors today. You don’t owe any money for care, you’re not in care, and there’s no foreseeable need for care. So that means you are welcome to place your property in the trust now.
This is just making the point that foreseeability is relevant when determining what the “purpose” of a transaction was. We don’t believe the guidance anticipates a trust structure being sold specifically to avoid paying care charges. The courts in practice determine “purpose” from surrounding circumstances.36 In the view of Care Act specialists we spoke to, it would be reasonable for a local authority to decide that someone who’d bought the MP Estate Planning structure37 had “deprived themselves for the purpose of decreasing the amount that they may be liable to pay towards the cost of meeting their needs for care and support”.38 Local authorities could obtain disclosure of MP Estate Planning’s advice in order to establish this. 39
They’d be aided in this by the statutory guidance, which gives putting assets into trust as a specific example of “deprivation of assets”:
Some local authorities have expressly identified “lifetime trusts” (like those created by MP Estate Planning) as examples of asset deprivation. 40 It’s notable that the people selling these trusts are almost always unqualified and unregulated, whilst actual qualified solicitorswarn against them.
It is therefore quite wrong for MP Estate Planning to confidently suggest it’s all about “foreseeability”, and ignore both the wording of the statute and the references to trusts in guidance:
In other videos, Pugh claims that putting property into trust is effective to avoid care fees if the trust is created more than two years in advance. There is no legal basis for this.
This is a particularly egregious error because the video above flashes onto the screen a clip from guidance from Age UK, which makes clear that it’s fundamentally the intention behind a disposal which is relevant:
The Society of Will Writers tells its members not to make this claim:
The trust defaults the mortgage
MP Estate Planning claim that you can put a property into trust without telling your mortgage lender. This is false. Most standard residential mortgages contain strict covenants prohibiting the borrower from transferring interests in the property (including beneficial ownership) without the lender’s express written consent.
“Transferring ownership of a property into a trust without informing your lender and seeking their consent would most likely be a breach of a mortgage’s terms and conditions.”
“The property can be taken out of the trust, mortgaged, and then put back into the trust”
This is very poor advice.
Taking the property out of trust doesn’t fix the fundamental problem that most mortgage terms prohibit transferring ownership of the property.
But it’s worse than that. There are now potentially two capital gains tax events (the trust disposing of the property to the parents, and the parents disposing of it back into the trust). If the value of the trust is over £325,000 then pulling the house out triggers an IHT exit charge. Then, when they put the house back into the trust after getting the mortgage, it triggers a new 20% IHT entry charge (on the value over £325,000). Their “simple” workaround could easily cost the client hundreds of thousands of pounds in tax every time they want to fix their mortgage rate.
Here’s a nonsensical explanation we saw from MP Estate Planning:
The “equitable value” is not a legal concept. The mortgage amount and the market value are almost always different. The lender is not the “legal owner” of the property. A real estate law specialist we spoke to concluded that whoever wrote this has no understanding of mortgages.
Incompetent advice
We have seen a series of badly drafted documents and incompetent responses from MP Estate Planning personnel:
We saw one trust where a mother was declaring a trust with her daughter as a trustee and discretionary beneficiary. The trust document listed the daughter as the settlor. When challenged on this, the adviser at MP Estate Planning didn’t appear to understand the difference between a settlor and a trustee.
An MP Estate Planning adviser did not understand that the fact value could pass back to the settlor made it a settlor-interested trust. He responded that “Any tax related matter should be dealt with by an accountant”: but no accountant was involved when they established the trust.
We also saw one trust deed with one of the worst drafting errors we’ve seen:
Under the “Exclusion of Settlor and Spouse” there should be a clause preventing the settlor and their spouse ever benefiting from the trust. This is necessary to prevent the settlor interested trust rules applying, causing (amongst other effects) an up-front capital gains charge. But instead someone accidentally duplicated the text of the next clause (“Applicable Law”) into “Exclusion of Settlor and Spouse”. That’s a serious error, because it means the trust likely will be a settlor interested trust.41
And, as noted above, we saw another deed where MP Estate Planning tried to create ownership as tenants in common, and failed (because they didn’t realise that requires two or more people):
It’s believed by our team that this kind of error is most likely caused by people with no legal qualifications drafting complex legal documents. Drafting trusts over land is a “reserved activity” that can only be conducted by solicitors and certain other qualified professionals – if unqualified staff are indeed drafting these documents then that’s a criminal offence.
The scale of the problem
A recent recruitment video claims that, in the first six months of 2025/26, MP Estate Planning made £1.66m in fees, with huge growth year-on-year. That implies they’ll bill at least £3m in fees this year.
However, most of their clients are buying multiple products, and so these prices quickly add up – we understand overall fees in the tens of thousands are common (and indeed that would be necessary for a team of this size to make £3m in revenue). Mike Pugh says:
“I do know that my competitors that offer the sophisticated high end stuff, they tend and – I’m talking Magic Circle and inside the M25 – they tend to charge either two percent of asset value or 10 percent of tax savings.
If you’re saving five million pounds, they could charge up to half a million… and I’m nowhere near the M25 – I’m in Bristol and we do not charge big city prices.
So we’re in the tens of not the hundreds of thousands.”
The claim that firms charge 2% of asset value or 10% of tax savings is, in the experience of our team, not correct. Legal/tax fees of £500,000 would be for very large estates, not people worth “mere” millions.
The response from MP Estate Planning and Mike Pugh
We asked MP Estate Planning to respond to the most significant points in this report:
Here’s our original email asking for comment:
And then, after MP Estate Planning acknowledged receipt:
Here’s their response. It reads like a press release, and doesn’t answer a single substantive point (other than the unconvincing “editing” explanation for their May 2023 video, as noted above).
This is our response to that letter:
We received a further reply – this time with responses to the “non-existent head of legal” and “use of US terminology” points that we regard as deliberately misleading:
We gave then Mike Pugh a final chance to respond substantively:
Pugh told us we’d receive a response to our technical questions: we never did. Nor did we receive an explanation as to why his previous small business went bust owing HMRC £1.7m.
Many thanks to B, S1, K and I for telling us about their experiences with MP Estate Planning (UK) Ltd.
This was a particularly complex investigation which we couldn’t have undertaken without a large team of lawyers and tax specialists, all acting pro bono. This article was written thanks to:
Inheritance tax: SH for her invaluable initial analysis, then further work from P and M and additional review from J2 and SH (again).
Other direct tax: D and Rowan Morrow-McDade (who found the 2023 video with the nonsensical claims about main residence relief)
Stamp duty land tax: J1 and Rowan, again.
Real retate finance: P
Care Act: V and Y.
Family law: T – and thanks also to N for picking up an error post-publication.
Insolvency law: A and I with additional review from C.
Corporate structure and business history: M.
Additional research and data: business intelligence provider Tech City Labs.
Plus numerous other practitioners who read through late drafts.
We usually can’t name our contributors, partly because it could be professionally awkward for their current employer, and partly because of concerns about retaliatory legal action.
For MP Estate Planning personnel to actually commit fraud would require them to know that they were making false claims and to be acting dishonestly; we don’t know if either is the case. It is plausible they are just reckless. ↩︎
We are reasonably sure it is the same individual. The Daniel James Irwin who was a director of Safe Hands had a date of birth May 1990. Daniel James Irwin, date of birth June 1990, is also a director of a previous Maplebrook trust entity. He has twoLinkedIn accounts, neither of which are updated, and neither of which show his time at Safe Hands. ↩︎
It is reasonably clear that an untrue representation was made by Mr Pugh with the intention of making a gain, and that he knew it was untrue. The crucial legal question to determine whether an offence was committed is whether Mr Pugh was “dishonest”. Under English law, this means asking whether his conduct was dishonest by the standards of ordinary decent people (regardless of whether the individuals themselves believed at the time that they were being dishonest). The subjective element of the test for dishonesty (see Ghosh (1982)) was removed by Ivey [2017] for civil cases, and that decision was confirmed to apply to criminal cases in Barton [2020]. The fact that a defendant might plead he or she was acting in line with what others were doing, and therefore did not believe it to be dishonest, is no longer relevant if the jury finds they knew what they were doing and it was objectively dishonest. The leading textbook of criminal law and practice, Archbold, states: “In most cases the jury will need no further direction than the short two-limb test in Barton “(a) what was the defendant’s actual state of knowledge or belief as to the facts and (b) was his conduct dishonest by the standards of ordinary decent people?”. ↩︎
We don’t think any real person would write “Best will writing service and lasting power of attorney in Bristol, UK” or “MP Estate Planning offers great services and customer care when it comes to estate planning, lasting power of attorney and will planning in Bristol”. ↩︎
We refer to English law because our usual team does not have expertise in Scottish law or the law of Northern Ireland; but we are reasonably confident that Pugh’s comments are equally inapplicable to Scottish and Northern Irish law. ↩︎
There would be stamp duty if the children took over the mortgage – but MP Estate Planning appears to leave the mortgage where it is. ↩︎
Tech City Labs kindly provided us with the report pro bono and has authorised us to publish it here. ↩︎
The trusts discussed here are discretionary trusts and settlements – the kinds of trust MP Estate Planning sells. The most common kind of trust is a “bare trust” or nominee arrangement – those arise all the time by operation of law in many ordinary personal and business contexts, and don’t normally have tax consequences. ↩︎
The lifetime rate of IHT is 20% but in practice, and especially where the trustees only hold assets not cash, the effective rate is normally “grossed up” to 25% as it’s the donor rather than the trustees that pay the tax. ↩︎
Plus an exit charge on any part-ten year period when/if the trust comes to an end. ↩︎
With complex rules that often, but not always, avoid double taxation. ↩︎
20% of £650,000 minus the £325,000 nil rate band. ↩︎
The RNB is £175,000 for her plus £100,000 from her late husband, who died in 1984. ↩︎
As we say in the introduction, for MP Estate Planning personnel to actually commit fraud would require them to know that they were making false claims and to be acting dishonestly; we don’t know if either is the case. ↩︎
After seven years another £325k nil rate band becomes available, but for the first seven years this structure is all downside. ↩︎
When is the valuation tested? Is it tested daily? Annually? Upon a specific triggering event? The deed is entirely silent. How is a valuation determined? Again – nothing. And how does “Fund B” Work? It’s not clear it can be a “bare trust” because under Saunders v Vautier, the beneficiary (the Settlor) would be entitled to call for the trust property – but here that can’t happen because the trustees are holding for both the bare trust and the discretionary trust. However the intention is clear enough that the trust lawyers we spoke to thought that the trust would likely be given effect, notwithstanding the very unclear mechanics. ↩︎
Ordinarily, transferring assets into a relevant property trust allows for capital gains tax to be held over under section 260 of the Taxation of Chargeable Gains Act 1992. However, section 169F specifically denies this relief for settlor-interested trusts. ↩︎
A gift to a trust is not usually subject to stamp duty land tax, because there is no consideration. However this is not a gift – the parent/settlor is getting something back – the right to receive all value over £325k. We’ve considered whether that gives rise to an SDLT charge, either on day one or subsequently – our conclusion is that it probably doesn’t (but it’s a complex question and we haven’t undertaken a full analysis). ↩︎
Patrick Soares says he believes the section applies if a child “treats [the property] has his home, is physically present there most weekends and for some holidays, has an earmarked bedroom and study, keeps some of his possessions there and has the keys to come and go as he pleases, and he is not just a guest or temporary visitor”. Emma Chamberlain takes a slightly more cautious view, saying that there must be substantive occupation even if not as a main home. These seem defensible readings to us – “occupy” clearly means actual physical presence but it doesn’t necessarily mean full time occupation. There is some risk in the Soares/Chamberlain approach, and we can’t exclude HMRC challenging such an arrangement on the basis that, for two people to “occupy” a property, their presence must be of similar (but not identical) intensity (which seems to have been the intention of the Government that enacted the rule). Other advisers take a more cautious view. ↩︎
There is no caselaw on this point. There are, however, non-tax authorities on the meaning of “occupy”; they illustrate the (obvious) point that it requires an actual presence, not just the potential for a presence. In this case we feel the purpose of the taxing statute (as elucidated by the Dawn Primarolo statement) puts the point beyond reasonable doubt. ↩︎
The Soares and Chamberlain articles have been widely read, and their approach has been adapted by some firms into a much less rigorous approach that we suspect Soares and Chamberlain would disagree with. For example, Countrywide says “The test is likely to be satisfied where, for instance, there is a gift of a share of the main residence to a child who visits the property on a regular basis, is able to come and go as they please, have their own key and leaves their possessions at the property. There does of course need to be more than mere storage of items at the property and so an occupier having their own bedroom and being able to come and go as they please would certainly make the test easier to satisfy”. This may be over-reading HMRC guidance on occupation in the context of the pre-owned assets rules – HMRC has an obvious incentive to give the term a wide meaning here, but HMRC guidance is not legislation and in practice cannot be relied upon by taxpayers. ↩︎
There are other more sophisticated structures involving s102B, and it has been suggested the GAAR could apply to them (see page 20 of this expanded version of the Patrick Soares article), but we don’t think the GAAR would be necessary to the MP Estate Planning structure. ↩︎
Even if MP Estate Planning’s “loopholes” did work to avoid the gift with reservation rules (they don’t), there is a separate anti-avoidance regime that can still impose an ongoing tax charge: the pre-owned assets tax (POAT). POAT was introduced to counter arrangements where someone successfully removes an asset (typically a home) from their estate for inheritance tax purposes, but continues to enjoy it. It is a standalone income tax charge on the benefit of continued occupation/use of an asset you previously owned or funded. The rules are complex but, given MP Estate Planning’s trusts fail to avoid the gift with reservation rules, we won’t go into them further. ↩︎
Sch 20 para 6(1)(a) says the donor’s continued “actual occupation of the land … shall be disregarded if it is for full consideration in money or money’s worth”. This is the statutory basis for the “pay market rent” approach. ↩︎
Ingram involved a “lease carve‑out” scheme: the homeowner created and kept a proprietary lease (so they had a real property right to stay), and only then gave away the freehold. Later legislation severely restricted that approach. Subsequent attempts to find similar work-arounds have failed. ↩︎
We think it probably isn’t disclosable under DOTAS because it is in sense “too simple”: there’s nothing contrived about it. It is however possible that the “premium fee” hallmark applies as a factual matter. ↩︎
Although less than three years may trigger a charge under the unrelated provision in paragraph 17A Schedule 15 Finance Act 2003. ↩︎
There seems to be a common view amongst some unregulated advisers that it’s safe to form a partnership, wait three years, and then incorporate. There is no such limitation on section 75A in the legislation or any HMRC guidance – the sole question is whether partnership and incorporation are, together, “scheme transactions”. Where a partnership is established as a step towards incorporation, then in our view there probably would be “scheme transactions”. That is particularly the case when there is no rationale other than tax to establish the partnership (and it’s hard to see what other rationale there could be). ↩︎
The courts have found trusts to be “other financial resources” in numerous cases of “real” trusts where the settlor influences the trustees, but does not have complete control. The test in Charman v. Charman [2006] 1 WLR 1053 is “whether, if the husband were to request [the trustee]to advance the whole (or part) of the capital of the trust to him, the trustee would be likely to do so”. ↩︎
Note we previously referred to section 37 of the Matrimonial Causes Act – that’s not relevant here where a parent is the settlor. Many thanks to N for pointing this out, and our apologies for getting this wrong. ↩︎
The Lemos judgment provides a useful example of how the courts apply section 423 in practice. ↩︎
In addition to incorrectly citing the Insolvency Act, Pugh also incorrectly claims this is a “criminal offense”. In the UK, transferring assets to put them beyond the reach of creditors is typically a civil matter leading to the transaction being set aside under section 423 of the Insolvency Act 1986. While there are some specific bankruptcy offences if a person is already bankrupt, merely putting assets into a trust to avoid future creditors is legally ineffective, but not generally a criminal offence in itself. ↩︎
See also the Local Government and Social Care Ombudsman’s approach to deprivation of capital cases. ↩︎
As is often the case with tax planning, this means that MP Estate Planning’s own marketing undermines the effectiveness of their product. Someone who obtains advice from MP Estate Planning and then creates a trust could well be in a worse position than someone who creates a trust themselves, or using some other adviser who doesn’t use care home fees as a selling point. ↩︎
Another way of putting the point is to distinguish two ways in which someone’s care needs might be foreseen. First, one may have a case where someone is medically unwell or infirm and for that reason it is foreseeable they may have care needs. Second, one may have a case where someone has been told “put your assets in a trust so that if you have care needs the local authority can’t touch them”; such a person has in fact foreseen that they might have care needs, even in the absence of any medical- or health-related reason to think that they will. ↩︎
A further point is that section 70 of the Care Act 2014 gives the authority the power to go after the recipient of the assets personally to make up the difference. We’re not aware of section 70 having been used against a trustee, but it seems to us in principle that it could be. ↩︎
For the reasons set out in our technical analysis above, the trust likely falls to be a settlor interested trust anyway, but the drafting means the planning would fail regardless. ↩︎
Last month, the High Court threw out an £8m libel claim brought against me by tax barrister Setu Kamal. The Court held that key parts of the claim were legally hopeless, gave summary judgment on the rest, and ruled that the case was a SLAPP: litigation brought to silence criticism in the public interest. An update – the Court ordered Mr Kamal to pay our costs in full, and as of 10 April 2026 we have received full payment.
This case shows three things. First, English libel procedure can still be weaponised to chill public-interest journalism, even where the claim is hopeless. Second, even when the new anti-SLAPP rules work, they still require a defendant with substantial financial resources. Third, the documents disclosed in the litigation show precisely how a small number of tax barristers facilitate abusive tax avoidance.
Shortly after the judgment was issued, Mr Kamal was suspended by the Bar Standards Board1, pending a hearing before a disciplinary tribunal. I don’t know the reason for the suspension; the timing is such that it probably does not relate to his conduct of the defamation claim against me.2
The background
In February 2025, we published a report about a firm called Arka Wealth.3 They’d published hundreds of TikTok videos promoting a scheme that claimed to eliminate all corporate tax, income tax, capital gains tax and inheritance tax – not just in the UK but across Europe. An unbelievable claim, and all the tax advisers I spoke to – in the UK and across Europe – said the scheme was technically without merit. Many thought it could amount to fraud. But the really surprising part was that the firm was backed by a tax barrister, Setu Kamal, who said in a YouTube video he provided an opinion to all of Arka Wealth’s clients.
Kamal declined to comment on our article, either before publication or immediately afterwards. Months later, he threatened defamation proceedings unless we removed the article, although he was never very specific about what, precisely, his complaint was. He then sent me an email demanding that I pay him 80% of the amount his clients claimed he’d lost in fees, and that I publicly state my “sincere belief” that he is “the leading barrister in the field of taxation in the country”:
There was then a strange episode in August when Kamal tried to obtain an interim injunction against me and Tax Policy Associates but, in a serious breach of court procedure, failed to give us notice of his injunction application. Fortunately the Court rejected the application out of hand. I wrote about that here.
Soon after that, Kamal commenced an £8m defamation claim – again against me and Tax Policy Associates.
We had two responses. The first was traditional: we applied to the court to strike out the parts of the claim that were technically hopeless, and sought summary judgment on the rest. The second was novel: we were the first defendants to rely on the new anti-SLAPP rules in the Economic Crime and Corporate Transparency Act 2023. I wrote about that here, including Kamal’s court papers and our strike-out application.
The judgment
The Court issued its judgment on 11 March 2026. We won on all grounds. Part of the claim was struck out, and we obtained summary judgment on the rest. The court also held that the case was a SLAPP – had any part of the claim survived the earlier rulings, it would have been struck out on that basis alone.
Costs were not argued at the February hearing, and so are not covered in the above judgment. Mrs Justice Collins Rice subsequently granted an order requiring payment of our £146,644 costs in full, on the indemnity basis4, by 1 April 2026. Mr Kamal has now paid that.
The judge kindly agreed that we could publish the following summary of her reasons:
The Defendants asked for costs to be assessed on the indemnity basis. The Judge addressed herself to the authorities cited, and noted that the bar for awarding indemnity costs was a high one (‘only if the paying party’s conduct is morally reprehensible or unreasonable to a high degree, so that the case falls outside the norm’).
She considered the fact the claim had been held to be a statutory SLAPP to be a relevant, but by no means determinative or even necessarily particularly weighty, factor in approaching the application of that test. That was because a claim becomes a SLAPP if any of a claimant’s behaviour discloses the necessary intentionality; and, as the judgment explained, the test is one of intentionality and not cause and effect. At the costs stage, including in approaching the test for indemnity costs, the Judge noted that a more holistic approach was necessary, as was attention to outcomes. She also observed that the well-established ‘outside the norm’ test for indemnity costs is at least arguably distinguishable from the statutory focus on ‘properly conducted litigation’ in the SLAPP test. She bore these factors in mind as being potentially in the Claimant’s favour.
She did, nevertheless, place weight on the matter of the unsustainable £8m+ valuation of the claim. The judgment had made findings in that respect both as to intentionality and as to outcome in its chilling effect. She accepted that that valuation would have had, and was intended to have, a significant effect on the Defendants’ conduct of the litigation throughout, its insubstantial basis not being apparent until very shortly before the hearing of the application.
She also placed weight on the Claimant’s attempt to advance a malice claim without adequately pleading it or even addressing the rules on pleading malice, and without any evidence or proffered prospect of evidence. As the judgment set out, that was an accusation of quasi-criminal dishonesty, and one which the Claimant had established no basis or entitlement to advance in High Court proceedings.
The Judge considered these to be features of the litigation history which (a) generally infected it and (b) were fairly capable of attracting to it labels such as ‘morally reprehensible or unreasonable to a high degree’ and distinctively out of the norm. She indicated that she was minded to proceed to an assessment on the indemnity basis in those circumstances.
The Judge gave the Claimant an opportunity to make any in-principle objections to that decision before it was finalised. None were submitted.
The fact we recovered all our costs is unusual even on the indemnity basis, and reflects our small and efficient legal team. It would be typical to instruct a KC for a “landmark” case testing a new law; we did not. It would also be typical to instruct a legal team led by a partner, supported by probably a couple of associates and a trainee; we had no partner, one associate and a paralegal. The fact that we achieved this result on such a lean basis is a tribute to that team: Matthew Gill and Charlotte Teasdale at the Good Law Project, and to our counsel, Greg Callus and Hannah Gilliland from 5RB. And thanks to the team who initially wrote the report, and everyone who supported us since – particularly Nik Williams, Index on Censorship and the UK Anti-SLAPP Coalition.
The case in court
Our skeleton argument for the court hearing is here, covering the “conventional” strike-out, summary judgment, SLAPP strike-out, and security for costs:
And here is Kamal’s skeleton in response:
We also have full transcripts: unfortunately copyright/licensing means we can’t publish them, but any journalists, academics or other researchers who would like a copy should get in touch.
Libel law chills free speech
First, this demonstrates the two big truths about English libel law.
Substantive libel law is fairly sensible, and a journalist who writes something that is true and/or opinion should expect to prevail in court.5
The procedural aspects of a libel claim chill free speech.
Kamal’s claim was hopeless, elements of it were downright abusive (and intentionally so), and his conduct of the claim was incompetent. In other circumstances it would be met with ridicule – but the sum he claimed was so large that I had to take it seriously. Dismissing the claim took six months, £146k costs, and ultimately an 85-page judgment. These costs were smaller than would have been the case with a traditional legal team.
For someone without my legal training or financial resources, it would be irrational to have fought Kamal. The rational thing to do would have been to give in, and delete the report. That’s why most libel threats succeed, and we never hear about them: a lawyer’s letter is sent, and the blogger or journalist quietly backs off. That’s a catastrophe for freedom of speech.
But it’s worse than that – it would have been irrational for a national newspaper to carry the story, because it was too niche to justify the editorial time and cost that a libel lawsuit carries. I have nothing but respect for the newspapersthatdofight huge libel claims – but they have to pick their fights, and that means small but important stories get missed.
This is the chilling effect of libel law. No other area of litigation has libel law’s potential to damage public life. Libel law enabled Jimmy Savile, Robert Maxwell, Cyril Smith, and many other monsters (note that I’m too cowardly to mention the still-living examples). Rules that are rational in commercial litigation become actively dangerous when they can be weaponised to silence critics of wrongdoing. And so it’s right that we should treat libel law, and other laws6 that SLAPPers are abusing, differently from other litigation.
That means dramatically changing the cost equation for defendants. The SLAPP strike-out goes a little in that direction, but even in my case – just about the most favourable imaginable – the cost equation was still brutal. More radical reform is required:
Make it much harder to bring claims. Right now, you can bring a libel claim without any evidence that a journalist said something false. The journalist has to prove truth (or opinion, or another defence). We should put the onus on claimants: require claimants to prove falsity, and that the publication wasn’t an opinion and wasn’t in the public interest.
Go further: introduce an American-style requirement to prove malice when the claimant is a public figure.
Give defendants assurance that, if they win, their costs will be covered. Make indemnity costs the default position.
Introduce sanctions against claimants who knowingly or recklessly make untrue statements in the course of pursuing a libel claim (whether they ultimately win or lose the claim).
Or go even further: take defamation out of the court and into informal “alternative dispute resolution” – faster, cheaper, and with no prize for the winner except a declaration that the article was false.
The Tax Bar enables abusive tax schemes
We published a report recently concluding that a small number of barristers were enabling abusive tax avoidance schemes which very possibly could be viewed as fraud, because nobody involved could seriously think the schemes had any prospect of success, and all the companies involved were liquidated as soon as HMRC started investigating.
We now have further evidence of this.
Kamal was claiming £8m in damages because he said he’d had a contract that was worth £8m, which he’d lost as a result of our article. My lawyers, Matt and Charlotte, realised something I’d missed – we were now entitled to ask for a copy of the contract. We received it just a few days before trial.
As the contract was referred to in court, I can now publish it in full:
The document has several extraordinary features:
Kamal had designed a tax avoidance scheme which supposedly enabled a company, Umbrella Link Limited7, to hire individuals (and on-supply them to recruitment companies) but avoid accounting for income tax/PAYE on their wages.
It’s stated that Kamal’s analysis confirms the scheme won’t have to be disclosed to HMRC. The document is also very careful to ensure it remains confidential. That strongly suggests that in fact it had to be disclosed to HMRC. Prima facie, this was an improper arrangement.8
Umbrella Link targeted contractors, often on modest earnings – particularly social workers. We expect most had no idea they were participating in a tax avoidance scheme. These schemes are fundamentally unethical.
The company paid Kamal £50,000 up-front for the scheme, plus 0.6% of the turnover of the company, and 0.4% for turnover over £8m. The nature of the scheme meant that Kamal was effectively receiving a percentage of the tax avoided.
The contract was signed on 11 November 2024. Our article on Arka Wealth was published 26 February 2025. But two weeks before that, HMRC had publicly listed the company as operating a tax avoidance scheme and told the company it had unlawfully failed to disclose the scheme to HMRC. The company was doomed from that point.
On 25 July 2025, HMRC issued a tax avoidance “scheme reference number” to Umbrella Link (with the five month delay probably thanks to delaying tactics from Umbrella Link).
These companies never defend their tax positions – their (mysterious) ultimate owners just let them fold. So at some point, HMRC presented the company with a tax bill, the company ignored it, and HMRC applied for a winding up petition on 27 October 2025. A winding-up order was made on 10 December 2025.
The narrow point is that Kamal was never going to make £8m from this company. It only had a few months of operation. His claim was abusive, intended to intimidate me. As Mrs Justice Collins Rice said:
Then there is the distinctly troubling matter of the £8m claim valuation and the contract on which it was purportedly based. Mr Kamal told me at one point in his oral submissions that he was going to deal with Mr Callus’s analysis of this document, but he did not do so. The spectacularly inflated figure can to at least some extent conceivably be attributed to Mr Kamal’s ignorance of the law of libel damages and the basis on which they are assessed. Before me he asserted a reserved position on his quantum of (special) damages; he said he had not yet fully pleaded his losses, and at this early stage in the litigation that is not uncommon. But the document in its own terms, and the publicly available information about the company, do not come close to supporting an £8m figure, even without any reference to libel principles. That cannot plausibly be attributed to mistake. It is plain on the face of it that Mr Kamal had inflated the value of his claim, in his sworn particulars of claim, beyond anything he knew he had a realistic prospect of sustaining.
…
I am not prepared either to accept that the deployment of the £8m contract valuation in the context of this litigation was behaviour more likely than not attributable to simple inexpertise, particularly when considered together with the other unjustifiable and unsustainable ‘compelled speech’ remedies demanded. It may be that the Defendants viewed this behaviour with a degree of scepticism because of its very extravagance, and the expertise and advice available to them might well have encouraged that scepticism. But it is plain enough on the face of the documentary evidence that Mr Kamal intended his demands to be taken most seriously and to have a serious impact, and it appears that, to at least some extent, that was borne out in practice.
This may have consequences for Kamal, but there’s a much more important point. Tax barristers (and Kamal is not alone) are entering into contracts which are pure conflicts of interest. There is no “independence” or “integrity” to an opinion that a tax scheme works, when the barrister is paid per pound that goes into the scheme. I find it hard to believe that such contracts are permitted by the Bar Standards Board – if they are, it’s a disgrace, and if they’re not, action should be taken.
Why Kamal lost
Here’s a very brief summary of each of the points:
1. Kamal tried to sue on a Google search result. You can’t.
He complained that search engines displayed the following description of the article: “Failed tax avoidance from Arka Wealth and Setu Kamal” which he said was defamatory.9 But the rule in the Charleston case is that you can’t sue for defamation based on a headline in isolation – only on the complete publication. So Mrs Justice Collins Rice said the pleading was “bad in law” and “certain to fail”:
2. Kamal alleged I was dishonest, with zero evidential basis
He pleaded “malicious falsehood” – meaning that I wrote the article dishonestly or with an indifference to truth. But he had no basis for this, even if every fact in his pleading was accepted. So Mrs Justice Collins Rice struck this out. It was “irremediably defective”.
3. Kamal said it was “false and misleading” for me to accurately report a High Court decision
At this point Kamal approaches dishonesty. He said it was “false and misleading” for us to write that a court had found that he’d breached his duty of candour to the court. That was bizarre, because a court had found exactly that. Mrs Justice Collins Rice granted the strike-out and said Kamal’s pleading was an abuse of court processes:
4. Kamal’s attempt to compel me to apologise had no legal basis
He asked the court to order me to apologise. But courts can’t compel speech. So Mrs Justice Collins Rice struck this out too – it was “bad in law, and certain to fail”:
5. The rest of the article was just honest opinion
We then applied for summary judgment on the rest of the libel claim, on the basis that it was honest opinion. It’s unusual to obtain summary judgment on an opinion point, but in this case Kamal’s pleaded meanings for the article were “disciplinary or regulatory action ought to be taken against” Kamal, he “poses a risk to clients and the public”, he provided advice that was “reckless, unethical or incompetent” and was “professionally involved in unlawful or discredited tax avoidance schemes”. Each of these was clearly an expression of opinion, so we obtained summary judgment:
Kamal spent much of his time arguing we’d defamed him by saying he devised or advised on the particular Arka Wealth scheme in question. But this wasn’t part of Kamal’s pleaded claim – and it never could have been, because we didn’t say that. We set out evidence from Arka Wealth and Kamal himself linking him to the scheme. More on that below.
The claim was a SLAPP
At that point, I had won. But we also applied to strike out the claim under the – new and untested – anti-SLAPP rules in the Economic Crime and Corporate Transparency Act 2023.
This required us to establish, first, that there was a SLAPP within the definition in section 195 of the Act.
That first requires satisfying the conditions in subsections (1)(a) to (c):
We could do this without much difficulty because:
Kamal’s actions had the effect of “restraining [my] exercise of the right to freedom of speech”. Defamation actions will almost always have this effect.
The “information” disclosed by the exercise of my freedom of speech had to be “to do with economic crime”. There was some discussion about the meaning of “information” but to my (non-libel lawyer) mind this is a straightforward point – the “information” is simply the stuff that we said.
The Arka Wealth scheme was plausibly tax fraud in several countries, potentially including the UK – and those were “economic crimes” within the definition.
I had to have “reason to suspect that an economic crime may have occurred and [believe] that the disclosure of the information would facilitate an investigation into whether such a crime has (or had) occurred”. I said I did, and Kamal didn’t challenge that.
The disclosure had to be “for a purpose related to the public interest in combating economic crime”. We had said there should be an investigation; that was sufficient.
We then had to show that the condition in subsection (1)(d) was satisfied:
“Inconvenience” in particular is a very low bar, but I’d also suffered some alarm/distress at the size of the claim, and certainly significant expense. And Mrs Justice Collins Rice had no difficulty concluding that numerous elements were beyond that ordinarily encountered in litigation:
And then the difficult element: was all this intentional?
Some of it was simple incompetence, but Mrs Justice Collins Rice concluded that key elements on balance were intentional – in fact she comes close to saying that Kamal had been dishonest:
We had established the first part. The onus for the second is on the Claimant – and (for reasons which are unclear) Kamal had failed to provide any sworn evidence to the court. So Mrs Justice Collins Rice had no hesitation in disposing of the point:
That just left the question of whether the Court should exercise its discretion to strike out the case. Mrs Justice Collins Rice concluded that, in light of Kamal’s behaviour, she would:
This is delusional. It bears no relation to the actual reasons why he lost.
But what of Kamal’s complaint that he didn’t provide an opinion on the scheme?
That point was never litigated, because Kamal never pleaded it. But he couldn’t have done – because we never said that he did provide an opinion. Our report was very carefully worded and says no more than we could prove from available facts at the time.
The people alleging that Kamal provided opinions on the scheme were Setu Kamal and Arka Wealth.
Mr Kamal should sue himself.
Footnotes
The BSB’s practice here is very peculiar. There is no public announcement of any kind when a barrister is suspended; the barrister just disappears from the BSB register. The BSB press office initially refused to confirm the suspension, which was discovered after members of the public called the Bar Council’s records department. ↩︎
For some time after the initial suspension, Mr Kamal maintained his website, which said that he was a barrister and invited the public to instruct him directly. His website, setukamal.eu is now offline. ↩︎
The website went offline in July 2025 and it appears the company ceased trading around that time. ↩︎
Generally speaking, the winning party in English litigation is entitled to their costs on the “standard basis”. This typically amounts to around 70% of actual costs. Where a party’s conduct is unreasonable or morally reprehensible to a high degree, “indemnity costs” can be awarded, typically amounting to 90% of actual costs. This was a very unusual case where we were awarded all of our claimed costs. ↩︎
Particularly the law of confidence, GDPR and privacy torts. ↩︎
The company was claimed to be ultimately owned by an individual resident in Mauritius, and later by an individual resident in Kazakhstan. It is likely these Companies House filings were false, unlawfully hiding the true beneficial owner. ↩︎
Promoters sometimes contest the application of the disclosure rules in front of tribunals – they have lost on almost every single occasion (the one exception was where the arrangement was disclosable, but the “promoter” targeted by HMRC wasn’t actually the promoter). ↩︎
Kamal’s actual pleadings were much more confused than this. He said he was complaining about the “slug” – the bit of the URL after the domain. But the slug was “tiktok-tax-avoidance-from-arka-wealth-why-the-government-and-the-bar-should-act” – Kamal should have referred to the website metadata that is picked up by search engines. That’s why Collins Rice J says “whatever he intended by them”. But even if he had pleaded the point competently, the rule in Charleston meant it was hopeless. ↩︎
Simon Goldberg1 and his UK-based organisation, Empower the People, are running an elaborate scheme to defraud the US Government. The group files fake US tax returns to trick the IRS into refunding their members’ everyday UK consumer spending – a practice the US tax authorities have repeatedly warned is fraudulent.
When YouTuber Salim Fadhley publicised the fraud, Goldberg reported Fadhley to the UK police for harassment, instructed a law firm to send a “cease and desist” letter, and ultimately commenced a private criminal prosecution against him in Chelmsford Magistrates’ Court.
Empower the People operates a wider pseudo-legal grift. They run bogus “mortgage-elimination” schemes – which the Financial Conduct Authority warns are scams and potentially criminal to provide. None of this is done for free – they charge £1,300 for the US tax scam, plus 13% of the return – but Empower the People fails to charge UK VAT on its services, or pay corporation tax on its profits.
We believe there should be a criminal investigation into Goldberg and his group, and that the CPS should immediately take over Goldberg’s private prosecution, and discontinue it if it is not in the public interest.2 HMRC and the FCA should also investigate what appear to be widespread breaches of tax and regulatory law.
Technical terms in this article
IRS (Internal Revenue Service)
The US federal tax authority. It processes US tax returns and sometimes issues tax refunds.
A US tax concept for the economic return on a debt instrument issued at a discount to its redemption value. It has nothing to do with everyday consumer spending.
A filing that advances arguments the IRS treats as legally baseless. The IRS can reject these filings and impose penalties. The IRS says 1099-OID schemes are “frivolous”.
A loose movement promoting pseudo-legal theories that claim (wrongly) that debts, taxes, and laws can be avoided, or cash magically generated, by using certain documents or phrases. Courts routinely reject these arguments.
Simon Goldberg says he’s found the ultimate loophole: a way to legitimately claim back almost every penny you have ever spent on everyday bills, credit cards, and mortgages, using the 1099-OID US tax form:3
The core claim is so absurd it is hard to understand how anyone believes it: whenever you pay a bill in the UK, your bank secretly creates a matching credit. Goldberg tells his followers they can claim this hidden credit as a cash refund directly from the US tax authority – the IRS. And so you can claim a cheque from the IRS covering almost all your day-to-day spending.
Goldberg says his organisation, Empower the People, will handle this entire process:
Tally up your spending: Members calculate their total spending across all bank accounts and credit cards for a given calendar year. Almost everything counts: utility bills, rent, mortgage payments, petrol, and even buying gold. Only cash withdrawals are excluded.
Hand over your passport: Members send their physical passports to Empower the People so they can apply for a US Individual Taxpayer Identification Number (ITIN).
Sign blank forms: Empower the People passes the financial figures to a secret “expert” (who calls himself “Paul Muad’ib” after the sci-fi character). Because the expert’s method is his “intellectual property”, members receive signature pages for two US tax forms(with nothing completed on the forms). They sign them in blue ink and send them back to Empower the People – pledging under penalty of perjury to the contents of a completed tax return they are never allowed to see.
Send the forms to the IRS: Empower the People couriers the forms to the IRS in carefully timed batches so it doesn’t look “bloody obvious what’s going on”.
Wait for the cheque: Goldberg promises that, if successful, the IRS will send the member a physical cheque in US dollars. He says that the IRS retains about 20% of the refund, and Empower the People takes a fee, leaving the member with a cash windfall of roughly 65% of everything they spent that year.
The cheques arrive: there is a success rate of about 50% – and Empower The People provide this proof that cheques are actually received from the IRS:4
Naturally there is a fee – an upfront “donation” of £1,300 per year claimed, plus a 13% “back-end fee”:
Members are then encouraged to “recycle” this fabricated wealth by spending it to pay off their mortgages – which they can then tally up and claim back again the following year, creating a “snowball” of debt-free cash:5
The reality
None of the claims are real. It should go without saying, but the IRS doesn’t knowingly give US tax refunds for UK consumer spending.
There have been many schemes like Goldberg’s, which use the 1099-OID form to trick the IRS into posting refund cheques. The IRS publishes an annual “dirty dozen” list of tax scams, and the 2009 list explicitly called out a 1099-OID fraud that perfectly describes Goldberg’s methodology:
These schemes are so persistent that the IRS continues to issue warnings about them, most recently including them in its 2025 list.
The US authorities do not just issue warnings; they aggressively prosecute 1099-OID promoters. In May 2024, a promoter was sentenced to five years in jail for running a scheme remarkably similar to Empower the People’s:
While most of the frauds prosecuted to date involved US citizens, international borders do not offer immunity. The IRS has successfully extradited 1099-OID fraudsters from Trinidad and Tobago and from Canada to face trial:6
In his webinars, Goldberg refers extensively to the “expert” who completes the forms – the anonymous man who calls himself “Paul Muad’ib”. We do not know who he is. It is possible he does not exist and is an invention of Goldberg. It is also possible he is a real person, with “expertise” in US tax fraud. The one thing we are certain of is that he is operating completely outside the bounds of legitimate US tax practice. If he holds a valid IRS credential, Federal regulations strictly prohibit him from charging a percentage-based fee.7 Whether credentialed or not, he is operating illegally as a ‘ghost preparer‘—charging for tax preparation but unlawfully hiding his identity from the IRS by failing to sign the returns he generates.8
How the fraud works
Goldberg provides a threadbare justification for UK residents using 1099-OID forms to claim US tax refunds: payment of bills creates a “security” and that, because “your time is priceless”, your bills have been discounted:
He says:
Because whenever you pay a bill, what you’re actually doing is creating another debt, as it were, or in many cases, new cash, a new security.
…
The fact of the matter is that your time is priceless. So whether you’re accepting a thousand pounds an hour, 200 pounds an hour or five pounds an hour, you have discounted your value, your time from infinity down to that figure. It’s been discounted. And then you issued bills and you were the original issuer of those bills.
Why does Goldberg say this? And why is one particular US tax form, the 1099-OID, so important?
A 1099-OID form is used to report “original issue discount” (OID) – taxable income generated under US Federal tax law when debt securities are issued at a discount from their maturity value. The company that issued the securities gives its investors a 1099-OID, and they include it in their US tax return. In some unusual circumstances, the issuer of the debt security will withhold US tax at 30% from the discount amount. The taxpayer can reclaim this in their US tax return – and in some cases this can result in the IRS issuing a cheque to a person. This footnote has a more complete example of how a 1099-OID normally works.9
A real 1099-OID refund scenario looks like this:
Diagram connections
Diagram connections
From Company issues $10,000 bond to investor for $9,500 cash to A year later, company redeems bond, paying investor $10,000 (Label: None)
From A year later, company redeems bond, paying investor $10,000 to Company withholds $150 tax from this (i.e. 30% of the $500 OID) and pays to IRS (Label: None)
From Company withholds $150 tax from this (i.e. 30% of the $500 OID) and pays to IRS to Company gives investor 1099-OID showing $500 OID and $150 withheld (Label: None)
From Company gives investor 1099-OID showing $500 OID and $150 withheld to Investor files tax return with 1099-OID and claims credit/refund of the $150 (Label: None)
None of this has anything to do with personal bank or credit card transactions. And nothing Goldberg says bears any relation to what is on an actual 1099-OID form, and his nonsense about our time being discounted bears no relation to the actual US tax definition of “original issue discount” in 26 U.S.C. § 1273(a)(1) (as explained in IRS guidance). Most importantly: at no point does Goldberg explain how a withholding tax refund can possibly be due, when his clients never suffered any US withholding tax in the first place.
Any feature of a tax system which can result in a cash payment by a tax authority is vulnerable to fraud10 – and that’s the problem with 1099-OIDs.
The essence of the fraud is simple: fabricate a 1099-OID to show withholding tax that you never suffered, and use it to claim a refund:
Diagram connections
Diagram connections
From UK consumer spends $10,000 to 'Expert' fabricates 1099-OID showing $10,000 of OID and $10,000 of tax withheld. No tax was actually withheld (Label: None)
From 'Expert' fabricates 1099-OID showing $10,000 of OID and $10,000 of tax withheld. No tax was actually withheld to EtP files tax forms showing $10,000 of income and overpaid tax of $8,000 (Label: None)
From EtP files tax forms showing $10,000 of income and overpaid tax of $8,000 to IRS retains 20% of the $10,000 as tax and refunds the remaining $8,000 (Label: None)
In principle, the IRS should always be able to spot this, because they should be able to see that they never received the withholding tax.11 In practice the timing of returns and refunds mean that the IRS often pays out refunds before it has reconciled refund claims with the filings it has received. The reconciliation also seems imperfect, probably because of the very large volumes and antiquated systems – so some 1099-OID frauds continue for a while before being discovered.
How much tax is being defrauded?
Empower the People’s 1099-OID scheme seems to have started in 2022. This cheque, from the webinar slide deck, shows it was issued in October 2022 and relates to tax year 2018.12
At its 2023 Annual General Meeting (AGM), the organisation boasted to members that it had processed 80 claims that year.
While the 2024 AGM presentation omitted the exact number of claims, it did reveal the group’s revenue from the scheme:
Based on their fee structure, this revenue implies they successfully defrauded the IRS of around $1m during the 2023-24 period.13
This number is actually surprisingly low if we check it against other claims by Empower the People. If people really were claiming refund cheques for house purchases14, the annual number would be significantly higher than $1m. Similarly, if Simone Marshall (co-founder of Empower the People) was correct when she said in this 2024 interview15 that they’d received a $536,000 cheque the previous week, then annual refunds would greatly exceed $1m.
There is a linked organisation, “You and Your Cash“. The relationship between Empower the People and You and Your Cash is not clear to us; in the interests of clarity we will refer only to Empower the People throughout this report. Both are unincorporated associations.17 There are a number of relatedcompanies which all appear to be dormant.
The reality is that Simon Goldberg (who sometimes calls himself “The Spaniard”) and Empower the People are part of what they call the “truth movement”, and most outside observers call the “sovereign citizen” movement.18Sovereign citizens claim to believe19 that the legal and financial system is a conspiracy, and that by using the right documents or forms of words, a person can exempt themselves from laws, eliminate debt and create money out of nothing (often by claiming tax refunds for tax that wasn’t paid).
These “pseudolaw” theories originated in the US but are now increasingly common here. These claims have no legal foundation, and as far as we’re aware, they’ve failed every time they’ve reached a court in the UK, the US, Canada or Australia (the countries where sovereign citizens are most prevalent). There is a magisterial analysis of sovereign citizen legal positions in the Canadian judgment Meads v Meads.20 We have reported on one of the most financially successful sovereign citizens, Iain Clifford Stamp.
Goldberg is unusual for a sovereign citizen in that the true nature of his beliefs, and the services he sells to members/clients, is not readily apparent. He went as far as denying to us that he was a sovereign citizen. But in this video, no longer online, he is much more candid:
Goldberg says:
He’s a “sovereign movement” (at 33:21)
Everyone has a “straw man” – the sovereign citizen belief that everyone is attached to a corporate legal entity (at 25:41 and 53:07)
Governments guarantee everyone’s debt (at 29:25)
Judges are bankers (at 27:26) – because “they sit on the bench, which is an archaic word for “bank”
Birth certificates are a “financial bond” (at 43:58)
We also obtained a copy of this presentation which sets out similar views:
Goldberg told us the presentation does not reflect his views and was used in a session to “debunk pseudo‑legal theories circulating online.”. But it is completely consistent with the views Goldberg himself expounds in the video above. The 1099-OID reclaim scheme webinars are full of sovereign citizen tropes, including that that everyday banking operates under “the law of the sea” (admiralty law).
As with many fringe political movements, the sovereign citizen movement is fragmented, with different groups often feuding with each other. Goldberg and Stamp have a particular animus, and both have published numerous articles and videos saying the other is fraudulent.22
The private prosecution
Salim Fadhley presents a YouTube channel exposing conspiracy theories.
In Spring 2025, Fadhley published a series of videos criticising Goldberg. Here the first of the videos23 – Fadhley refers to “The Spaniard”, which is the name Goldberg often uses online:
if you have time, we would recommend watching this video and judging the tone and content for yourself before reading the rest of this section of our report.
Goldberg subsequently reported Fadhley to the police for harassment, and then commenced a private criminal prosecution against Fadhley and two other individuals. Goldberg himself is the private prosecutor, instructing a reputable barrister – Gary Summers of 9BR Chambers – to act for him. Goldberg crowdsourced donations to pay the legal fees.
Chelmsford Magistrates’ Court granted the summonses on 25 September 2025, and the barrister’s chambers published a press release. This goes much further than merely announcing the fact of the summonses, and states as fact that there was a “campaign of online harassment” and that the defendants “engaged in a pattern of defamatory, abusive, and racially charged communications across multiple platforms”. It adds that:
Despite opportunities for constructive engagement, the three individuals chose instead to continue to weaponize social media, targeting EtP’s trustees, members, and partners with falsehoods and inflammatory content which were not expressions of free speech but calculated efforts to harass, intimidate, defame, and destabilise.
We infer that this was drafted by Goldberg and/or Empower the People, not the barrister.
The prosecution is currently adjourned pending determination by the Crown Prosecution Service of whether to take it over. The next hearing is listed for 20 April 2026.
Given the contempt of court rules, we will not express any view on the harassment allegations. It is, however, our view that – on the basis of the evidence presented in this report – it is not in the public interest for Goldberg to be a private prosecutor. We will, therefore, be asking the CPS to take over the prosecution, and discontinue it if it is not in the public interest.
(We understand that Goldberg is also crowdsourcing a private prosecution of Iain Stamp. Whatever our views of Stamp, in our view it cannot be in the public interest for Goldberg to prosecute him.)
Before commencing the prosecution, Goldberg instructed a law firm, Artington Legal, to send this “cease and desist” letter to Fadhley:
In our view this was an improper letter for a solicitor to send to an unrepresented individual:
Meritless threats: It states that Fadhley faces potential prosecution for breaches of GDPR by “obtaining or disclosing personal data without consent”. Obtaining personal data is not, in itself, a breach of GDPR. Furthermore, there is no suggestion in the letter that Fadhley actually disclosed personal data at all. This threat of prosecution for GDPR breaches appears meritless and contrary to the SRA guidance on SLAPPs.
Ignoring journalistic exemptions: The letter entirely disregards the significant exceptions to GDPR that apply when processing is for journalistic purposes and the publisher reasonably believes it is in the public interest. The ICO expressly recognises that journalism is not limited to traditional media and applies to independent YouTubers.
Unparticularised claims: The letter makes broad, completely unparticularised allegations of defamation, which is again contrary to the SRA’s warning notices on abusive litigation and SLAPPs. The letter doesn’t even attempt to say what statements are being complained of, much less why they are defamatory.
Misrepresenting civil procedure: The letter concludes: “Failure to respond or comply will be treated as a refusal to remedy your breaches, and our client will take the necessary steps to protect their rights and interests without further notice to you”. This statement is untrue. A solicitor knows that their client cannot simply commence civil court action “without further notice”. The Civil Procedure Rules require pre-action letters to be sent in a specific format, which this letter does not follow.
The evidence for the 1099-OID fraud
This report is based on extensive documentation and video evidence provided by multiple independent sources.
The mechanics of the entire reclaim process are set out in detail in Empower the People’s “Standard Operating Procedure” document (which we obtained from two separate sources):
Clients participating in the scheme sign up online:
And are then required to sign this contract:
We are always meticulous before publishing allegations of fraud, and we presented our documentary evidence to Goldberg well in advance of publication. His response was not just to deny committing fraud – he outright denied that Empower the People provided any 1099-OID services at all:
And:
He even went so far as to claim the “Standard Operating Procedures” manual was fabricated as some kind of decoy:
All of this is a lie.
Here is a promotional flyer for an Empower the People webinar in August 2022, explicitly advertising a 1099-OID scheme:
And here is a complete recording of that webinar, in which Goldberg details exactly how his organisation runs its 1099-OID operation:24
We also obtained a recording of another, shorter, webinar, we believe from Spring 2023, covering much of the same ground:25
The video snippets interspersed throughout this report are drawn directly from these two recordings. Both webinars use this Powerpoint slide deck – the author in the metadata is “Simone Marshall”, co-founder of Empower the People.26
We can go back a little and see how the operation was set up. Here is Goldberg, at a members’ meeting in 2022, explaining that they’ve hired someone to operationalise the fraud by hiring “Ambia”, who they describe as a “1099 expert” because she has “undergone the 1099 process with Simon [Goldberg], and is very confident in the process and how to do it. She will be taking on that process when we roll that product… that benefit out, which is very imminent”:
And we can jump forward to see some of the claims made more recently. Here’s an excerpt from an interview with Simone Marshall (co-founder of Empower the People) in 2024.27. She discusses how Empower the People’s “1099 service” is much more effective than the service provided by their rival, Ian Stamp/Matrix Freedom:
“The only person in the UK that is successfully doing this is Spaniard [i.e. Goldberg]. He’s been doing it for three years now. Last week we had a cheque for $536,000, alright? So it works. Simon wouldn’t do stuff if it doesn’t work or if it’s going to hurt somebody. It’s all about reputation.”
(We are sceptical of the claim she received a cheque for $536,000. That seems much larger than the other indications of the scale of the operation.)
There is little reference to the 1099-OID scheme on the public internet, but there are traces – for example on the “You and Your cash” affiliate page28 it says:
1099 OID Essentials is not included, but 1099 OID Claims are – see the 1099 Session on Jedii Interactive for more details.
We wrote to Goldberg that he had lied to us in his initial written response. We have not received a reply.
Have Goldberg and his team committed fraud?
We believe this report demonstrates there is sufficient evidence for a criminal investigation of Empower the People and, if supported by that investigation, a prosecution.
The IRS aggressively prosecutes promoters of 1099-OID schemes for tax fraud, and sometimes prosecutes scheme participators (and anyone who signs a US tax form they haven’t read is in a very precarious legal position). So it seems reasonably clear that Goldberg and his colleagues are at risk of a US federal prosecution.
However, given that the participants, promoters, and evidence are overwhelmingly based in the UK, this may be a case where a UK prosecution of the promoters is more appropriate.29
Here is how the Crown Prosecution Service summarises the offence of fraud by false representation:30
The Empower the People scheme involves a series of blatant false representations: that the client’s ordinary consumer spending was “original issue discount”; that a large amount of tax was withheld when in fact none was; and that a tax refund was due when the IRS explicitly states it is not.
The scheme intends to make a gain for Empower the People’s clients (through the refunds) and for Empower the People itself (through the upfront and back-end fees it charges). It is therefore defrauding both the IRS and Empower the People’s own clients.31
The crucial legal question is whether those involved were “dishonest.” Under English law, this means asking whether their conduct was dishonest by the standards of ordinary decent people (regardless of whether the individuals themselves believed at the time that they were being dishonest).32
The leading textbook of criminal law and practice, Archbold, states:
“In most cases the jury will need no further direction than the short two-limb test in Barton “(a) what was the defendant’s actual state of knowledge or belief as to the facts and (b) was his conduct dishonest by the standards of ordinary decent people?”
In our view it is highly likely that Goldberg and his team knew full well that the IRS views 1099-OID schemes as illegitimate. We base this on the following five points:
1. Basic research reveals the fraud
As noted above, the IRS has included 1099-schemes in its “dirty dozen” list of tax scams, starting in 2009 and continuing to the most recent list in 2025. A simple Google search for “1099-OID scheme” reveals many websites explaining the fraud, including a Wikipedia page and a report of a successful IRS prosecution of a scheme looking almost identical to Goldberg’s scheme. It strains credulity to believe that Goldberg and his team did not see any of this, particularly after Salim Fadhley publicly accused him of fraud.
2. A massive rejection rate
Goldberg says their “success rate” is 45 to 50%33. No legitimate adviser sees half their tax forms rejected. This alone should have put him on notice that the IRS did not accept his legal positions.
Furthermore, Goldberg admits they have had filings formally rejected as “frivolous”.34. He gives the impression this is a minor administrative hurdle, but a basic Google search would have revealed that it is serious for a filing to be rejected as frivolous. Indeed that same Google search would have revealed an IRS notice which specifically describes Goldberg’s own scheme as frivolous, and would have revealed recent prosecutions for essentially the same scheme.
To explain away this high failure rate, Goldberg invented a story blaming rogue IRS staff for throwing applications in the bin to reduce their workload:35
OK, but someone in their bloody wisdom decided that, well, I’ve got all this backlog of paperwork where people have been working from home or they’ve been off sick or they’ve decided to jack it in. And in fact, a lot of people that were in the US that were from other countries were sent home. So a load of cheap workers left, which left the IRS short on staff, created a backlog. And so what did someone do? What’s the easiest way to get rid of a paper backlog, do you reckon? Well, let me tell you what some bright spark decided to do was bin all the paperwork over at the IRS. I know it sounds ridiculous, I know it sounds hard to believe, but a member of staff actually trashed a whole load of paperwork in order to get rid of it. I guess that’s one way of clearing a backlog but anyhow they were then found out. There was an audit conducted on the IRS – I think it was by the Fed – and they discovered that this had happened and it all blew up and was reported in the Washington Post.
3. Empower the People deliberately stagger their form submissions to prevent detection
Goldberg explicitly states that Empower the People does not submit all client forms at once. They stagger them so that the authorities do not notice what they are doing:
“It goes by courier to the IRS to make sure it doesn’t get lost in the bloody post, all right. Now from the moment it’s been couriered – because we have to time this, we don’t send them reams of stuff and hundreds of cases all at once because then it’s bloody obvious what’s going on. We don’t want it to be obvious what’s going on. We want these things to slip in with what the elite are doing, and what the nobles are doing, and what the bankers are doing.”
“So the IRS are on the lookout for people that are processing these claims because we’re not supposed to, we’re not part of that elite group. We’re not part of their club. So they don’t necessarily know everyone that’s not part of the club, right? So they’re on the lookout.”
This strongly implies a consciousness of guilt – an understanding that the IRS would reject the refunds if they understood what was going on.
4. Empower the People ensure their clients never see the tax forms submitted in their name The clients don’t ever see what’s written on the tax forms that bear their signature:37
“Then we’re going to need certainly digital files, so scans of the passport to be sent over through [their admin assistant], through us to the expert38 so that the expert can create the forms for you and complete the forms for you
And you will be provided with the signature pages only because the actual mechanism that has been formulated by the expert – it is his intellectual property.”
People are signing US tax forms, under penalty of perjury, without knowing what they contain. The IRS says “never sign a blank tax form“, but that is exactly what Empower the People requires. British citizens are signing US federal tax forms, under penalty of perjury, without knowing what they contain.
We’ve never heard a tax adviser claim that the way they complete simple tax forms is valuable intellectual property. We expect the reality is more sinister: if the clients saw the completed 1040-NR and 1099-OID forms, they might immediately see that they were committing perjury. They would see a form falsely claiming that a UK bank39 withheld thousands of dollars in US federal income tax, which is obviously untrue (and Goldberg at no point even mentions withholding tax to his clients). By only providing the signature pages, the “expert” ensures the client remains entirely ignorant of the specific lies being submitted to the US government in their name.
5. Internal fears of IRS scrutiny
A source provided us with an internal chat log between Empower the People staff during their 2025 AGM, in which EtP’s “paralegal” said:
“Unfortunately, arseholes like Stamp and now that Salim guy have most probably raised the bar of scrutiny at the IRS.”
Conclusion
Even if Goldberg and his colleagues began as true believers in sovereign citizen theories, a jury could well conclude that, as time went on, they must have realised that their core claims were untrue. If so, we expect most ordinary decent people would say that their behaviour was dishonest. Ultimately that is something a jury would have to decide.
What else does Empower the People do?
While the 1099-OID scheme targets the US government, Empower the People also runs a sprawling pseudo-legal operation targeting UK institutions, local authorities, and consumers. Here’s their description of upcoming projects at a 2022 meeting:
“1099 reclaims” is the US tax fraud discussed in this report (and which Goldberg denied to us that he operates). The others are various sovereign citizen-style pseudo-legal services which Empower the People sell to their members (for a fee).
Most of their claims are now hidden behind members-only logins, but some are still available, for example:
” If you know what you’re doing, and if you understand why it works, and your true relationship to the SYSTEM and in particular the CORPORATE STATE, then “yes”, you can clear debts using nothing more than a signature! “
The explanation for why this works is incoherent:
A source provided us with a complete set of the documents which Empower the People use to provide these services. This includes standard-form templates as well as drafted client letters. We will not be publishing all the documents,40 but a few examples show how the operation is both dangerous and absurd.
This is Empower the People’s “acceptance for value” template. It purports to discharge debts by “accepting” a bill as a money order and appointing the creditor as “fiduciary trustee” to set off the account. This is a standardsovereign citizenapproach, and it is legally meaningless.
This is a template document intended to nullify a Transport for London penalty. It relies on an incomprehensible claim that the then-Secretary of State for Transport, Grant Shapps, was appointed by Empower the People under a power of attorney (similar documents are discussed here):
Much of Empower the People’s activity involves charging adherents for pseudo-legal documents that supposedly will eliminate mortgage debt. In this arena, they’re competing with Iain Stamp. Like Stamp’s operation, the documents are an incoherent mixture of legal misunderstandings and conspiracy theories, none of which are recognised by English law.
A slight variation in the Empower the People documents is that the correspondence is directed to the Land Registry rather than to the client’s bank. Here’s an example:
When that correspondence is (inevitably and correctly) ignored by the Land Registry, Empower the People send further rounds of correspondence, and eventually (after ten letters) send a final letter claiming that the failure to respond gives rise to a massive financial penalty. In this example they claimed the Chief Executive of the Land Registry had, by ignoring their correspondence, assented to pay a penalty of £39m:41
This is nonsense. It is a fundamental principle of English law that you cannot create a contract where another party’s silence is deemed acceptance. We are unaware of any court in England, or indeed in the English speaking world, accepting arguments like this.42
These activities present a severe risk to consumers, who may be fooled into paying steep fees for documents that have zero legal effect. Worse, by following this “advice,” clients may end up defaulting on their mortgages and losing their homes.
The Financial Conduct Authority published a notice in 2022 warning consumers from dealing with people like Empower the People. The FCA said that they believed these services constituted “claims management services” requiring regulatory authorisation. The FCA’s prosecution of Goldberg’s rival, Iain Stamp, states the FCA also believes these activities breach the prohibition on unauthorised debt counselling, mortgage advice and financial promotions. The regulatory experts we spoke to agree with this assessment.
These regulatory breaches may amount to a criminal offence.
The FCA told us:
“We can’t comment on individuals.
We have warned consumers about false claims that they can avoid having to pay their mortgage, taxes or other debt.
We would urge any consumers who are struggling to speak to their lender and ask for support.”
Failure to pay UK tax
As well as facilitating US tax fraud for its members, Empower the People appears to be systematically failing to pay its own UK taxes.
Here is Empower the People’s accounts for 2024, published at their AGM:
As an unincorporated association carrying on a trade, Empower the People is subject to corporation tax – but the accounts from this and previous years suggest no corporation tax has ever been paid.43
The payments members make to join the 1099-OID scheme are described as “donations” but obviously are not – they are fixed payments for a specific service.44 That, and the fact the group’s revenue is above the £90,000 registration threshold, means the payments are subject to VAT.45 Empower the People should be registered for VAT, and accounting to HMRC for VAT on the fees it receives for the services it provides. We believe it does not.
We asked Simon Goldberg why Empower the People appeared to pay no VAT or corporation tax. He did not respond.
It may be relevant that, in this video from 2013, Goldberg claims that tax is voluntary:
Goldberg’s justification is that tax legislation applies to “person” but, “according to the Acts of Parliament and the Interpretation Act, the definition of the word ‘person’ is an artificial entity, corporate soul or legal fiction”. It’s an obviously false claim, rebutted by one look at the legislation, but US sovereign citizens have been making similar arguments, and failing in court, for decades.46
Where did Goldberg get these ideas?
Simone Mitchell, co-founder of Empower the People was recently interviewed on a podcast. She told the host that Goldberg “studied under Winston Shrout”.47 And Goldberg himself said at a meeting that “having woken up, [he] went to some Winston Shrout seminars”:
Failure to safeguard its members personal information
Empower the People is taking advantage of vulnerable and naive people by selling them schemes that are in some cases just ineffective, and in some cases criminal. There’s an additional problem: a complete failure to safeguard their data.
The breach is more than technical. The day after we published this article we were contacted by several people who had noticed that Empower the People stored client/members’ documents on their website without any security.49 Anyone could go to a standard WordPress API endpoint and see a complete list of all the files on the website, including pseudo-legal documents drafted for their members (for example claiming millions of pounds from the Land Registry).
We discussed this with information security specialists who told us that this kind of vulnerability is routinely discovered by automated scanning tools that continuously crawl the internet looking for these kinds of misconfiguration. Criminal groups routinely use automated scanning tools to locate websites with exactly this type of misconfiguration and harvest exposed documents for identity theft, fraud, or resale. The specialists we spoke to said that vulnerabilities of this type are commonly discovered within days or weeks by automated scanners, and that it was therefore plausible that the documents had already been indexed or downloaded by third parties.
We reported the vulnerability to Empower the People the next day, 27 February. We didn’t receive a response, but soon after, they blocked direct access to the documents. However they failed to block access to the complete list of documents, including the names of many of their clients/members. We wrote to Empower the People again on 3 March reporting this; access to that list has now been secured. We didn’t receive a response, although it seems Empower the People has asked its members to write to us complaining about the data breach. Those complaints would be better directed at Empower the People.50
Before we knew about the vulnerability, we received a large number of Empower the People’s internal documents (perhaps obtained through this vulnerability, perhaps otherwise). We’re passing them all to the authorities but will not retain copies of any personal information.
Many thanks to B for initial research, K, P and C for their US tax expertise; P, C and M for additional research; C2 for UK regulatory insight; N for advice on the mutual trading exception; and Michael Gomulka and A for English criminal law advice. Thanks to J for invaluable comments on a late draft, and to Dr S for picking up errors on timestamps.
Footnotes
An obvious point: Simon Goldberg is a fairly common name, and a search on the internet for Simon Goldberg finds people who are nothing to do with the Goldberg that is the subject of this article. ↩︎
This case illustrates a known problem with private prosecutions; the lack of any assurance that the private prosecutor is acting in the public interest. The Government closed a consultation on the subject last year, and it’s widely expected that the law will change in the next two years to introduce a mandatory code of practice, separate investigative and prosecutorial functions, a requirement for private prosecutors to meet the Director of Public Prosecutions’ (DPP) public interest test, and to introduce an accreditation system and regular inspections for private prosecutors. ↩︎
This and other video excerpts in this report are compiled from the webinars in the evidence section below. Here we have edited together different sections so as to clearly show what is proposed in one video, and added subtitles. The edit is consistent with the overall message, as is clear if you watch the whole of the webinars. ↩︎
We have not been able to verify if the images are genuine, but we expect that they are. Recent US prosecutions of people running these schemes (discussed below) show that the schemes can be extremely successful, at least in the short/medium term. And it would make little sense for EtP to continue to operate the scheme for four years if nobody ever received a cheque. So EtP’s claimed success rate of 50% may or may not be accurate, but we expect that their clients have received a material number of cheques (and the figures discussed below support that). ↩︎
This clip illustrates what a peculiar organisation Empower the People is: it starts with nonsensical claims into creating a “snowball” of free cash from IRS using an obvious fraud, then segues into detailed and rather sensible advice as to how to pay down your mortgage. ↩︎
Although it is possible that in the Goldberg case, a defendant could successfully argue that it is more appropriate to prosecute in the UK, given that is where the witnesses and evidence are. The offences that were extradited had more connection to the US, including the use of US bank accounts. ↩︎
When a person prepares a tax return for someone else they are supposed to obtain a “preparer tax identification number“, add it to the return and sign the return, which is then signed by the taxpayer. Empower the People’s “expert” doesn’t do this. He is a “ghost preparer” – invisible to the IRS (there’s another excellent article on that subject here). ↩︎
A company issues securities with a face value of $10,000 to an investor. The securities are issued at a discount, so the investor pays $9,500. A year later, the securities redeem for $10,000. The company provides the investor with a 1099-OID form showing the company’s name and the $500 of “original issue discount” income (in box 1). The investor then includes this income in their US tax return.
If the investor is a UK resident then, in very rare cases, the company would be required to withhold US tax at 30% on the “original issue discount” of $500. So it withholds $150 and pays the investor $350. It gives the investor a 1099-OID form specifying the company’s name and (in box 4) the $150 of tax the company withheld.
It must be stressed that this is a highly unusual scenario. We spoke to three experienced US tax counsel, and none had ever seen “original issue discount” withholding applied to UK retail investors – box 4 is usually empty. That’s because in practice the withholding tax exemption for “portfolio interest” would almost always apply. The cases where that exemption wouldn’t apply – e.g. securities held by banks, bearer securities, securities where the interest is contingent on profits – are unlikely to be relevant to debt securities held by normal UK investors.
But in this unusual case, it would make sense for the UK retail investor to complete a US tax return and obtain a refund of the $150 of tax withheld. They obtain a US tax number from the US and complete a US tax return, using form 1040-NR, and file it together with the 1099-OID given to them by the issuer. The investor isn’t subject to US tax on the original issue discount income (because they’re not resident in the US) but they get a credit for the $150 on the 1099-OID. If the investor had no US taxable income at all, they’d receive a cash cheque for $150. ↩︎
The withholding tax is in most reported fraud cases equal to the “discount” – that should ring alarm bells given the actual withholding tax rate is 30%, not 100%. And a further bell should ring because, when the issuer of a debt security gives a 1099-OID to an investor, they file an identical copy to the IRS – a modern tax system really should only issue refunds once withholding tax payments and 1099-OID forms have been received, and basic initial checks have been satisfied. ↩︎
It’s common in these frauds to file for retrospective reclaims. ↩︎
If we assume they processed 80 claims in 2024, then the total initial fees were 80 x £1,300 = £104k. The chart shows about £230k of income – if the additional £126k represents the 13% back-end fee then that implies around £1m of refunds were obtained, i.e. $1.3m. Of course it’s possible that there were more claims in 2024 than 2023, which would mean more of the £230k comes from the initial fee and less from the 13%, implying a lower level of refunds. We don’t know if that’s the case, so believe it’s fair to say “around $1m”. ↩︎
There are, perhaps, three possibilities. First, our estimate could simply be wrong – the fees may not work our in the way we infer from Empower the People documents – and the refunds larger than our estimate above. Second, our estimate could be correct, and Goldberg/Marshall are exaggerating – the refunds are much less successful, or much smaller, than they suggest. Third, the refunds are much larger but the money is not all being booked in Empower the People’s accounts, for whatever reason. ↩︎
You and Your Cash claims to be a “private trust”, but probably isn’t. ↩︎
In 2010, the FBI said it regarded sovereign citizens as domestic terrorists – for the very good reason that people who claim laws don’t apply to them tend to attack public authorities, courts and police officers. Since then, it’s become common for people promoting sovereign citizen ideology to vehemently deny that they’re sovereign citizens. We should be clear that we don’t regard this group as terrorists, or indeed as physically dangerous in any way. The combination of sovereign citizen ideology and US gun rights means that the position in the US is much more dangerous than that in the UK. Here, whilst there have been cases of sovereign citizen violence, they have been much more limited. ↩︎
We say “claim to believe” because sovereign citizen “gurus” often make large amounts of money by selling sovereign citizen schemes, and it’s often not clear if they really believe what they say, or it’s just a scam. ↩︎
An archaic statute which is probably no longer in force, but at the time provided a practical solution for the families people lost at sea by deeming them to be dead after seven years. It appears at some point someone in the US confused the name of this Act with “cestui que trust” – an archaic term for beneficiary. This became a common sovereign citizen belief, and is used by fraudsters in the UK to sell fake car insurance. The Ministry of Justice has received dozens of Freedom of Information Act applications from people convinced “cestui que vie” trusts are real, and now refer people to the detailed response noted above. ↩︎
We would caution against relying on anything that either person (or their organisation) says. For example this article, which accuses Goldberg of US tax fraud, appears to be AI written and references to documents/sources that are not provided and may not exist. This article does not use anyone connected with Stamp as a source, and our article on Stamp does not use anyone connected with Goldberg as a source. ↩︎
Fadhley mentioned Goldberg in an earlier video, but only in passing. ↩︎
AI-generated transcript here, or here with time markings. We should add that we are not completely certain this is the exact webinar promoted by the flyer above – the time of year appears to match, but there could be an additional webinar around the same time which we have not yet obtained. ↩︎
AI-generated transcript here, or here with time markings. This video, unlike the previous one, shows images of participants during the Q&A at the end. We have blanked out the participants except for Goldberg, out of fairness to people who may in some cases be victims of a fraud. Note that the audio is very out of sync by about 45 seconds – we haven’t corrected this because we didn’t want to modify the file (beyond the redaction). ↩︎
Noting of course that metadata can easily be added, removed and altered by anyone at any time; it’s not evidence that the document is genuine (the preponderance of other evidence makes that clear beyond reasonable doubt) but is an indication that she prepared the slides. ↩︎
We are linking to our archive of the page, because we anticipate it will be amended shortly. It was live on 26 February 2026. ↩︎
We expect the police/CPS would not prosecute the scheme participants. A case could be made that they are involved in a conspiracy to defraud and/or fraud by false representation, but establishing dishonesty for the retail participants would be much more difficult than for the promoters. ↩︎
There are other possible offences, for example conspiracy to defraud. ↩︎
The clients might not feel defrauded if they end up making money, but (based on Goldberg’s own figures) roughly half pay fees and never receive a refund; furthermore, those receiving a refund may eventually be required by the IRS to repay it with penalties. ↩︎
The subjective element of the test for dishonesty (see Ghosh (1982)) was removed by Ivey [2017] for civil cases, and that decision was confirmed to apply to criminal cases in Barton [2020]. The fact that a defendant might plead he or she was acting in line with what others were doing, and therefore did not believe it to be dishonest, is no longer relevant if the jury finds they knew what they were doing and it was objectively dishonest. ↩︎
See the second video, 01:06:57 to 01:07:53, and 01:11:51 to 01:12:08 ↩︎
The Washington Post reference may be a complete misreading of this event – the IRS destroyed 30 million paper-filed information returns (1099s and W-2s filed by third-party companies, not personal tax returns) because their antiquated software was being taken offline for the 2021 tax season. It wouldn’t have impacted Goldberg’s 1099-OID claims. ↩︎
This is from the second webinar, cropping out the other participants (thus the low resolution). Note that the audio is very out of sync. ↩︎
That’s the anonymous person who calls himself “Paul Muad’ib” after the sci-fi character.↩︎
Another possibility is that the form is completed in line with the sovereign citizen conspiracy theory that everyone has an “all caps name” which is a company, and their “all caps name” is stated as the issuer. That seems less likely; we’d hope the IRS’s systems would pick up if JANE SMITH LIMITED was a stated issuer on a 1099-OID. ↩︎
We are withholding the bulk of the documents because of the obvious concern that they could be adapted for use by other sovereign citizen groups, and we have no desire to add to the burden on the public authorities, courts, and businesses who have to deal with this nonsense. If any researchers or authorities would like a copy of the documents, please get in touch. ↩︎
In principle this kind of correspondence could amount to a criminal offence, such as fraud by false representation or blackmail. In practice it tends to just be binned. ↩︎
Although others have certainly tried to play games by pretending that someone can be forced to agree to pay penalties by magical contractual wording. ↩︎
In our view EtP is clearly carrying on a trade of providing services. The fact the services may be illegal does not prevent it from being taxable (and see also here). The “donations” are in our opinion taxable income, either because they are in reality payments for services, or under the rule in Falkirk Ice Rink. Many of the expenses won’t be deductible, particularly any which amount to the commission of an offence. The “mutual trading” exception is unlikely to apply because some members are being charged large fees to participate in the 1099-OID scheme, but (broadly speaking) they don’t get any enhanced rights to the association’s surplus. The very commercial nature of the fees charged for the services also feels unlike a normal mutual trading situation. ↩︎
The leading case on this point involves a Dutchman called Mr Tolsma, who played a barrel organ on a street corner and invited passers by to leave donations. The Dutch tax authorities claimed he had to account for VAT on these payments, because he was making a supply (or barrel organ music) to those passing by. The court disagreed; the passers-by heard the music whether or not they made a donation. There was no “necessary link” between the musical service and the payments to which it gave rise. There is a “necessary link” between Empower the People’s 1099-OID services and the “donations” they charge. ↩︎
Often relying, as Goldberg does in this video, on looking up words in an old US legal dictionary, and thinking that has force of law, and indeed overrides statute law. ↩︎
Their website is run on WordPress, a standard platform for hosting websites, with a “plugin” that enabled pages for members to be secured. However the plugin did not secure the members’ documents, which anybody could access, and the API was not locked down. ↩︎
The exposure may constitute a breach of the UK GDPR. Personal data must be processed “in a manner that ensures appropriate security”, including protection against unauthorised access (Article 5(1)(f) and Article 32 UK GDPR). Leaving members’ documents accessible through a public API for an extended period strongly suggests that appropriate technical and organisational measures were not in place. In addition, organisations that become aware of a personal-data breach must notify the Information Commissioner’s Office within 72 hours if the breach is likely to pose a risk to individuals (Article 33). Where the risk is high – for example because personal documents have been exposed – the affected individuals must also be informed (Article 34). Failure to implement adequate security measures or to notify the ICO of a notifiable breach can lead to regulatory investigation, enforcement action, and potentially substantial financial penalties. ↩︎
The Renters’ Rights Act unintentionally turns hundreds of thousands of ordinary residential tenancies into an annual stamp duty reporting obligation, often for tax bills of only a few pounds. Financial Times report here.
The Renters’ Rights Act 2025 contains a fundamental reform: from May 2026, most residential tenancies in England will continue indefinitely – fixed term tenancies are abolished. That has an overlooked consequence: an ordinary tenancy that keeps running requires a stamp duty calculation every year, and if the tenancy lasts long enough, stamp duty will eventually become due.
If nothing changes, we estimate that, in the next three years, 150,000 households in private rental accommodation will enter this annual regime. They will then have to pay and file every year for the rest of their tenancy.
Many more will become liable to pay and file in the years that follow:
The amounts of tax will in most cases be very small, but calculating and filing the tax – and doing so every year – is something we believe most people won’t anticipate (and will find highly inconvenient). There’s an automatic fixed penalty of £100 for late filing, and £200 for filing after three months.1
Worst still, it’s possible that some tenants could have a stamp duty filing obligation very soon after the Renters’ Rights Act starts applying, on 1 May 2026.
These seem like anomalous results, which we don’t believe the Government intended. We suggest below how the law could be changed.
The new rules
Most people renting property in England have historically signed an “assured shorthold” tenancy, typically for twelve months. If they and the landlord wish to continue the arrangement then a new twelve month tenancy is signed before the old one expires.
(The Act does not apply to Wales, Scotland and Northern Ireland; housing is devolved – so the issue discussed in this report is relevant only to England).
The impact of stamp duty
Most people are familiar with stamp duty2 applying to the purchase of freeholds and long leases (such as when someone buys a flat, typically with a large up-front payment and then a small ongoing rent). In cases like that, where a large sum is payable up-front, stamp duty then applies on that sum at rates escalating from 0% to 12% (or more in some cases).
However, stamp duty can apply to short term tenancies too.
The basic rule is that stamp duty is charged on all leases3 (including most residential tenancies, regardless of term) at 1% of the net present value (NPV) of the rent, to the extent the NPV of future rental payments exceeds £125,000.
The “net present value” of a stream of payments is (broadly speaking) a measure of how much it would cost to buy that stream of payments today. So if, for example, I promise to pay you £1,000 in a year’s time, the net present value of that promise is a little under £1,000, because you have to wait a year for the payment. The rate we reduce it by is the “discount rate“. In economic terms, the appropriate discount rate will vary depending on the circumstances, but for SDLT purposes it is fixed by statute at 3.5%.
Right now, this is only rarely relevant to residential tenancies.
In much of the private rented sector – particularly for higher-value or agent-managed lettings – fixed-term tenancies were commonly renewed under a new tenancy, rather than being allowed to roll into a statutory periodic tenancy. For stamp duty purposes, this mattered: each new tenancy was treated as a separate lease4, and a one-year tenancy would have to have a very high rent for the NPV of the rental payments to exceed £125,000 (the monthly rent would have to be over £10,500, implying the property is worth £2m+). In these cases the tenant has to file a stamp duty return and pay a small amount of stamp duty.5
That changes fundamentally from 1 May 2026.
The Renters’ Rights Act and the “growing lease” rule
The Renters’ Rights Act converts most short-term tenancies6 into periodic tenancies. The Act didn’t amend stamp duty legislation, so we have to look at the standard stamp duty rule for periodic tenancies in paragraph 4 of Schedule 17A Finance Act 2003.
Under what’s sometimes called the “growing lease” rule:
This means that many residential tenancies will now become subject to stamp duty. This was not the case before the Renters’ Rights Act – the usual practice in the private sector of a short fixed-term tenancy, followed by another short fixed-term tenancy, did not trigger the “growing lease” rule.8
The amount of tax will usually be small – the time, cost and hassle of filing the stamp duty return will likely be more significant (particularly as there is no online filing unless you are a solicitor or conveyancer; you have to call HMRC and order a paper form).
Stamp duty was not mentioned in the impact assessment for the Renters’ Rights Act, and we cannot find any other reference to the issue in the official documentation regarding the Bill. We therefore expect that this result is unanticipated.
Some examples:
The student house
Say eight friends are sharing a student house in London (a “house in multiple occupation” or HMO) and they sign the tenancy together (as joint and several tenants). The rent for such a property could easily be £1,000 per person per month, or £96,000 in total each year.
Historically this would have been a one-year tenancy. The stamp duty consequence was that stamp duty looked only at the £96,000 paid in that year. The NPV of this was obviously less than £125,000, so there was no stamp duty.
However the Renters’ Rights Act means that the tenancy is converted into a periodic tenancy.9
So the students have to test the NPV on every anniversary of the tenancy. On the first anniversary they have to calculate the NPV of two years’ rental payments, using the formula in the stamp duty legislation.10 The result is £182,000 – and stamp duty of £573 is due (i.e. 1% of the difference between £182,000 and £125,000). A similar calculation, and a payment, will be required every year.
If the HMO was let on separate tenancies then the issue wouldn’t arise (as stamp duty would look at each individual tenancy). That’s the case for most non-student HMOs.
Ordinary households
In the great majority of cases, the rent will be much smaller than in the student HMO example, so it will take longer for stamp duty to be triggered.
For example:
For England as a whole, the median rent for new tenancies is about £960 per month11 – a £125,000 NPV would be reached, on the 13th anniversary, triggering an £8 stamp duty bill.
In London as a whole, median rent is about £1,80012 – stamp duty of £70 would be triggered on the sixth anniversary.
In Kensington, median rent is about £3,100 per month13 – so stamp duty of £116 would be triggered on the third anniversary.
What happens to tenancies signed before 1 May 2026?
If a tenancy was granted for a fixed term from (say) 2 May 2025, what happens when the Renters’ Rights Act comes into effect? The Act is clear that the previous tenancy continues, but as a periodic tenancy.14 So, is the tenant required to undertake a one-year anniversary calculation on 2 May 2026?
The position is not entirely clear, but we believe the answer is that the first calculation would be made on 2 May 2027 (provided the tenancy still exists then). The reason is that the stamp duty legislation has a specific provision (in paragraph 3) covering leases for “a fixed term that may continue beyond the fixed term by operation of law”. This provides that the lease is deemed to be extended by one year, and for the first stamp duty return to be filed within 14 days of the end of that year (or, if the tenancy ends before then, 14 days from the date the tenancy ends).
If that’s correct then only in limited circumstances will tenants become subject to SDLT soon after 1 May 2026. Say for example our students from the first example above jointly signed a fixed term tenancy starting in September 2024 and ending in June 2026. The Renters’ Rights Act makes the tenancy a periodic tenancy, but the students still terminate the arrangement in June 2026 as originally planned. In such a case there would be a calculation date in June 2026 and (on the numbers in our example), stamp duty would be due.
We may, however, be wrong. It is possible that HMRC would argue that once the Renters’ Rights Act takes effect, a tenancy that commenced on 2 May 2025 is no longer a “lease for a fixed term”, so paragraph 3 does not apply at all. On that view, the standard rule in paragraph 4 would govern the position. Paragraph 4 treats a periodic tenancy as a lease for an indefinite term, which is initially taken to be a one-year lease for SDLT purposes. Because Schedule 17A operates by reference to the original effective date of the lease, that one-year treatment would be anchored to the original start date of the tenancy. The result would be a calculation date of 2 May 2026 – a very unfortunate result, and one we cannot discount.
We propose below that the law is changed to resolve the growing lease problem entirely for most residential tenancies. If that is not done before 1 May 2026, then it would be helpful if HMRC could clarify that anniversary dates will not fall before 1 May 2027 (save in termination cases, where HMRC could agree not to pursue penalties).
So how many people will be affected overall?
We estimate over 150,000 households will have to start filing and paying stamp duty at some point in the next three years. Many more would pay in the years after that – illustrated in the chart at the top of this report.
These figures come from a model we constructed, using the official data on how long private renters typically stay in one property.15 For each tenure-length band, we calculated the rent that would trigger SDLT at the relevant anniversary (using the kind of NPV calculation above), then estimated the share of renters paying at least that rent using a log-normal approximation calibrated to EHS and ONS rent statistics. Applying these proportions to the size of the private rented sector16 gives an estimate of how many households would eventually face an SDLT filing obligation:
Only a very small number of renting households pay SDLT under current rules – just a few hundred.
Under the new rules, around 150,000 will become liable to file and pay within three years (i.e. by 2029).
Another 110,000 would become liable to pay and file within the three years after that (i.e. by 2032).17
Another 60,000 would become liable at some point after that – so, eventually, a total of around 330,000 households will be affected.
We set out the methodology in full below, and the calculations, inputs and sources can all be seen in this Excel file.
The impact on tenants
The amount of stamp duty would normally be very small. The Kensington flat example would owe about £116 of stamp duty on the third anniversary of the tenancy, £300 on the fourth anniversary, and an additional (and slightly decreasing) amount every subsequent year.
The problem is a practical one. The responsibility for filing and paying stamp duty lies with tenants. These rules were designed for property transactions handled by professionals familiar with NPV calculations. Expecting ordinary people to understand the rules, monitor anniversary dates, carry out an NPV calculation and file and pay stamp duty is not realistic.
If tenants fail to file a stamp duty return with HMRC, there would be an automatic £100 fixed penalty, rising to £200 after three months (plus additional tax-geared penalties after twelve months).
This is not a rational result. The administrative cost and hassle, for tenants and HMRC, will likely exceed the tax at stake.
The response from the Government
We received this response from Ministry of Housing, Communities and Local Government:
In the private rented sector, stamp duty land tax is payable on cumulative rents of over £125,000. Periodic tenancies are treated initially as being for a fixed term of one year and, since tenancies cannot be assured if they have a rent of over £100,000, no new assured periodic tenancy will be immediately liable for SDLT after the Bill is commenced (see SDLTM14050). Periodic tenancies may subsequently become liable for SDLT if they continue beyond one year, however (see SDLTM14070).
At present, where periodic tenancies exist and a lease is renewed by renegotiation then the term starts again and new SDLT thresholds would apply. Because of this, the tax threshold will never be reached for the vast majority of private tenants.
If any changes are needed to accommodate the new tenancy system within the SDLT regime, this will be announced at a fiscal event as normal.
This summarises the current SDLT treatment of periodic tenancies, but doesn’t address how making periodic tenancies the default will greatly expand the number of tenants facing repeated anniversary calculations and potential filing obligations. That suggests the interaction between the Renters’ Rights Act and SDLT has not been fully considered.
How to change the law
We expect the Government will regard this result as both unexpected and undesirable.
It would be sensible to change the law to prevent stamp duty filing/payment obligations resulting from normal residential tenancies.
Any solution has to avoid either an unintentional tax cut for high value property18, or creating new anomalies19 We also don’t think there’s a simple procedural fix.20
SDLT is not meant to impose disproportionate compliance costs for trivial liabilities. Our suggestion is therefore to prevent a small figure from an NPV calculation triggering any stamp duty consequences. We’d simply defer any stamp duty filing or payment obligation under the “growing lease” rule until the stamp duty reaches £5,000 (with all filing and payment obligations falling-away if the tenancy ended before that figure was reached).21 This means:
For most tenants, no stamp duty would ever fall due.
Even most “high end” rental properties would only pay stamp duty in rare cases – for example that average Kensington flat would only hit £5,000 of stamp duty after 25 years.22
Student HMOs would in practice never face a stamp duty bill, because students will leave after three or four years, and a £5,000 stamp duty bill would only arise (on the £96,000 rent example above) after seven years.
The cost to HM Treasury would be very low, as the only significant revenues from these rules come from very high value lettings, and they would be unaffected.
It’s easy to implement, shouldn’t result in any material tax losses, and would prevent large numbers of tenants being landed with a stamp duty headache they never expected.
How we estimated how many tenants will be affected
We start with official data on how long tenants typically stay in one home, combine it with data on rents, and then estimate how many of today’s tenants will still be in the same property when the stamp duty rules start to bite.
There are three steps:
Step 1: How long tenants stay in one property
The English Housing Survey publishes data showing, at a single point in time, how long current private renters have been in their home (for example, less than a year, 1–2 years, 3–5 years, and so on). This is cross-sectional data: it tells us how long existing tenancies have lasted so far, not how long they will last in total.
Long tenancies are over-represented in such snapshots (because they are around for longer), so we first convert this data into an estimate of tenancy survival: the probability that a tenancy which exists today will still be in place after 1 year, 2 years, 3 years, etc.
To do this, we:
treat each official duration band as covering a range of years (e.g. 3–5 years),
calculate an implied “per-year” density within each band, and
derive survival probabilities at the start and end of each band.
Between the official bands, we interpolate survival smoothly so that it declines year-by-year but exactly matches the survey data at the band boundaries.
Step 2: Linking survival to the stamp duty rules
Under the “growing lease” rule, stamp duty is tested at fixed anniversaries of a tenancy (after 1 year, 2 years, 3 years, etc.). At each anniversary, there is a monthly rent above which the net present value of future rent exceeds £125,000 and stamp duty becomes payable.
For each anniversary year we therefore calculate:
the monthly rent that would trigger stamp duty at that anniversary (using the statutory 3.5% discount rate), and
the share of renters paying at least that rent, estimated using a log-normal approximation calibrated to official rent statistics.
We assume (for lack of joint data) that rent levels are independent of how long tenants stay.
Step 3: Counting tenants who are affected for the first time
A tenancy can only become subject to stamp duty once. So for each anniversary year we estimate:
the probability a tenancy survives to that anniversary, multiplied by
the share of renters whose rent is high enough to trigger stamp duty at that anniversary but not earlier.
Applying these proportions to the total number of households in the private rented sector gives an estimate of how many of today’s tenants will first face a stamp duty filing and payment obligation after 1 year, after 2 years, after 3 years, and so on.
Assumptions, limitations and sources of error
These are very approximate estimates and should be regarded as indicative rather than statistically robust.
We have made several simplifying assumptions that tend to reduce the estimated number affected in the short term (notably, no rent increases and no behavioural response). However, other modelling choices – particularly the inferred survival curve and the rent distribution approximation – could bias results in either direction.
These are stock estimates, looking at households renting at commencement of the Act on 1 May 2026. New tenancies after May 2026 would add further cases over time; within the first three years the incremental effect is likely modest relative to other uncertainties, but it would increase the totals.
The calculation excludes social housing and lodgers – we are only looking at households.
Rent levels are assumed independent of tenancy length – that’s necessary due to lack of joint data; the impact on the final estimate is not clear to us. If higher rents correlate with shorter tenancies (plausible), our method overstates longer-term SDLT incidence; if higher rents correlate with longer tenancies (also plausible in some segments), we understate long-term SDLT incidence.
Rent distribution is approximated using a log-normal model calibrated to mean and median rents; rent distributions have been found to be log-normal, but the results should nevertheless be regarded as no more than indicative.
For simplicity we assume rent is constant in nominal terms over the tenancy (i.e. no rent increases). In practice rents typically rise over time; allowing for rent increases would bring forward SDLT liability and increase the number of households affected within a given time horizon.
The data on length of residence is in bands of more than one year. We assign a single “median growing lease anniversary” per band as a pragmatic shortcut, but it is a source of discretisation error.
Our estimate likely under-counts the kind of student joint tenancy HMO that we covered in the first example; they will be under-estimated by the log-normal approximation (because economically the students are renting individually, but legally (we assume) they are renting jointly).
Our approach ignores the technical point footnoted above – the possibility that tenancies starting before 1 May 2026 which convert to periodic tenancies on that date might have their first anniversary almost immediately. We instead assume our technical conclusion is correct, so there can be no first anniversary before 1 May 2027.
Most importantly, this is a static estimate, ignoring behavioural responses. The intended outcome of the Renters’ Rights Act is that people will stay in rental properties for longer; that will of course mean more tenants come into scope of stamp duty than our estimate suggests.23
The estimates should therefore be treated as indicative – but are in our view sufficient to show that the issue is real, widespread, and likely to grow over time unless addressed.
The calculations, inputs and sources can all be seen in this Excel file.
Many thanks to Aadam Ashton for the original tip – he deserves sole credit for spotting this point. Thanks John Shallcross and K for their SDLT expertise. Thanks to B for help with the statistical data and analysis.
Filing over a year late can result in tax-geared penalties. There is also interest for late payment (but, oddly, no penalties). ↩︎
Technically the tax is stamp duty land tax – “stamp duty” is a different tax entirely. However, most people call SDLT “stamp duty” and so we will do so in this article in the interests of clarity. Our apologies to SDLT experts. ↩︎
Housing law usually calls these arrangements “tenancies”. SDLT legislation instead uses the term “lease”, and a residential tenancy will usually be a “lease” for these purposes. In this section we use the terms interchangeably. ↩︎
Subject to the anti-avoidance rules around “linked” transactions – see Robert King’s comment below. ↩︎
For all but the most expensive properties the actual tax will be small (1% of the excess over £125,000) – the filing obligation is often more painful than the actual cost. ↩︎
With a few exceptions, e.g. certain student properties, for which see further below. ↩︎
All these calculations look at the SDLT rules as at the date the lease was signed, with subsequent changes to rates and thresholds therefore irrelevant. ↩︎
Because SDLT applies by reference to each new lease rather than a single “growing” lease, so the periodic-tenancy rules rarely become relevant to residential leases in practice. It’s an example of a particularly formalistic tax rule. ↩︎
There is an exception for purpose-built student accommodation, and large student housing developments with 15+ students in one building, but there’s no exception for student accommodation/HMOs in general. ↩︎
The statutory formula is:
Where ri is the rent payable in respect of year i, n is the term of the lease (in years), and T is the statutory discount rate (currently 3.5%). The formula therefore deems the rent to be paid annually and in arrear, even when it isn’t; for short leases this can produce a very different result from a “real” NPV calculation. In Excel you can use the PV function, e.g. PV(3.5%, 2, -96000, 0,0). ↩︎
The median English rent in the year to September 2023 was £850. The ONS no longer publishes the median rent, only the mean – the “Private rental market summary statistics in England” series was discontinued after the December 2023 release. We can, however, approximate the current median by assuming the median has increased at the same rate as the mean. This is a heuristic, not a statistically robust estimate. ↩︎
The source for this is ONS London data which shows median rents by bedroom counts, but no overall median. However the data does show the count of properties in each bedroom count. We can take from this that the overall median rent falls 36% of the way into the two bedroom property band, and interpolate the overall median. We then up-rate this by 4% reflecting rent inflation ↩︎
This figure is estimated from the ONS’s average/mean for Kensington of £3,700/month. Again please regard as a heuristic not a statistically robust estimate. ↩︎
In contradistinction to some previous housing reforms, which have resulted in a new tenancy being deemed to be granted. ↩︎
The link is to the most recent data, for 2023/24. We up-rate by 1% population growth each year to give an approximate figure of 4.8 million for 2026/27). ↩︎
i.e. because their rent is lower and so more years are required before the NPV hits £125,000. ↩︎
For example exempting residential property from the “growing lease” rule. That would reflect the way land transaction tax works in Wales, where LTT simply doesn’t apply to residential leases – but presumably that has a limited impact given high value residential lettings are less common in Wales than England. ↩︎
For example, it might be thought an obvious solution would be to exclude deemed periodic tenancy from the “growing lease” rule. That would however create the anomalous result that a lease explicitly stated to be periodic could trigger stamp duty, when one with a fixed term (and deemed to be periodic) would not. People would accidentally end up with very different stamp duty results. ↩︎
In principle much of the problem could be eliminated if “growing lease” SDLT reporting became automatic; but that would require new systems, and would take time for HMRC to implement. We doubt the cost would be justified. Alternatively, some might suggest moving the responsibility and liability onto landlords and/or letting agents – that would, however, be a significant change in how stamp duty applies… and many landlords will in practice be no more able to operate the rules than their tenants. ↩︎
Why £5,000? The purpose of the threshold is not to define what is “small” in the abstract, but to separate cases where SDLT has a real purpose (and raises real revenue) from cases where it is imposing disproportionate compliance costs (for negligible revenue). A threshold at this level has three effects. First, it removes almost all ordinary residential tenancies from scope, including joint student tenancies, because realistic periods of occupation do not generate SDLT liabilities of this magnitude. Second, it leaves genuinely high-value residential leasing unaffected, because long fixed-term or very high-rent arrangements reach this level quickly and would still give rise to SDLT liabilities. Third, it ensures that SDLT only arises where the amounts at stake are sufficient to justify professional advice, monitoring and enforcement. ↩︎
In theory this is lost revenue for HMRC, but it’s revenue we expect nobody ever anticipated – certainly it’s not in the RRA impact assessment. ↩︎
We considered whether evidence from Scotland’s abolition of no-fault eviction in 2017 could be used to quantify the effect on tenancy length. However, pre-pandemicdata show only small changes in short-term churn, which are too small to be distinguished from sampling and modelling uncertainty (and the confounding effect of the pandemic means it’s not safe to compare e.g. 2017 and 2025). We therefore do not attempt to model this dynamic effect quantitatively. ↩︎
Nearly 100,000 properties in England and Wales – worth c£460bn – are owned by offshore companies. We’ve conducted an extensive analysis and created an interactive map that lets you search by property or location, and see where offshore companies are being used to hide the true ownership of the property. In 44% of cases, representing c£190bn of property, the real human owner (the “beneficial owner”) is hidden, despite the law requiring disclosure.
Some of this will be accidental, but the evidence suggests that a significant proportion is intentional. Some people are just not registering. Others are registering offshore companies as beneficial owners, rather than the individuals who really control the property. And over a fifth of all properties are held by trusts that fail to declare the true owner.
The UK’s failure to properly enforce its own rules is enabling tax evasion, money laundering, sanctions-busting and corruption. The Times has a report here.
This reports sets out our findings in detail and proposes legal and enforcement changes. We also provide open access to our map, so that you can find properties near you, or anywhere in England and Wales, owned by offshore companies that are not correctly disclosing their true ownership.
We have published our methodology in full so that interested parties can reproduce, challenge and improve our analysis.
The rules, and who’s ignoring them
In 2022, new rules required most overseas entities owning UK real estate to register with Companies House and declare who owns them – their “beneficial owners“. As manypeoplehave pointed out, the rules have been widely ignored.
We analysed data1 from the Land Registry for England and Wales, cross-referenced to Companies House and other data sources. Disappointingly, our analysis has to exclude Northern Ireland because the data isn’t available, and exclude Scotland because Registers of Scotland imposes unacceptable licensing terms. More on that here.
Our analysis puts every offshore owner in one2 of the following categories:
Grey: We have no idea who owns 8% of the offshore companies owning English/Welsh of property. They ignored the law, and the company failed to register with Companies House.
Red: Another 5% of offshore companies list a foreign company as their beneficial owner, hiding the real individuals controlling the company. This is generally unlawful.
Amber: Another 10% of overseas companies are registered with Companies House, but claim they have no beneficial owner. In most cases this is not correct – it’s hiding the true owners.
Blue: 21% of offshore companies list a beneficial owner who is just a trustee – the largest category of hidden ownership. The real beneficial owner is not identified. We believe in most cases this is unlawful.
Green: That leaves 56% of offshore companies where the real beneficial owner is clearly being disclosed.
What the colour categories mean
(If you click on the word “category” anywhere in this article, a window will pop up with the colour codes and explanations.)
In some cases the overseas property owners are taking a legally correct or at least defensible position. But in most of the cases we’ve looked at, they are not.
Technical terms in this article
Proprietor
The person or persons registered at the Land Registry as owning land in England/Wales
The register of overseas entities was last analysed in detail in Catch me if you can: Gaps in the Register of Overseas Entities, from the Centre for Competitive Advantage in the Global Economy (CAGE). The overall picture of non-compliance hasn’t changed, other than that the number of overseas entities claiming to have no beneficial owner has more than doubled. 3
Explore the data, and see who’s hiding ownership near you
Here’s our interactive webapp. If you’re on mobile, or want to view full screen, click here. You will need to register and agree to terms before using. This isn’t a formality – the Land Registry requires us to retain your email address and IP address (but we do not, and technically cannot, see what you are doing with the app). More on this below.
The colour codes in the webapp reflect the colour categories.
The webapp will start a tutorial when you load it; you can run it at any time by clicking the “help” icon.
Full details below of the webapp, our methodology, its limitations, and what we think it demonstrates. Please don’t jump to assumptions about tax evasion/avoidance/illegality without reading this report in full. Locations of markers are approximate. All the information in the webapp comes from publicly available sources.
How many overseas owners fail to disclose?
Here’s the proportion of property owners failing to identify the beneficial owner, broken down by the date of the transaction – reporting started in 2023, and transactions from earlier years were required to register later that year.4
The number of proprietors simply failing to register is much lower now than for the “legacy” pre-2023 registrations: 1% in 2025 compared to 9% pre-2023. That’s to be expected: if someone buys a property today then the conveyancer is likely to remind them of the registration obligation, and the lender likely to enforce it.5
However, the number of proprietors claiming to have no beneficial owner has more than doubled – 9% before 2023, 11% in 2024 but 19% in 2025. There will always be a certain proportion of proprietors that genuinely have no beneficial owner, but it’s not obvious why that would increase over time. A plausible explanation is that the lack of enforcement has emboldened people to make false statements.
And here’s our illustrative estimate of the total value of offshore-held property in each category. The total value of all offshore-owned property is c£460bn, of which c£190bn does not have an individual beneficial ownership disclosed.
If we break it down by region:
These figures are illustrative estimates, and not statistically robust – they should therefore be regarded as broad, order-of-magnitude estimates intended to indicate scale rather than precision. We take the average price paid for overseas-entity properties that had a recorded purchase price in 2023–2025, and then scale up by the number of overseas-entity properties in each category. That can’t be done for regions with very small numbers of transactions in a year (e.g. Yorkshire and Humberside had no offshore transactions between 2023 and 2025).
The estimates are based on Land Registry price-paid entries from 2023–2025 for overseas-entity properties.6 For each category we compute an average price from that sample, then multiply by the total number of properties in the category. We attempt to remove obvious duplicates caused by portfolio transactions.7, and extrapolate to the full stock of property held by overseas entities.
There are numerous reasons why this won’t statistically represent the actual value of the properties.8
Is there a difference for different property types?
We can only identify the type of property for some of the entries in the dataset but, where we can, residential property makes up about a quarter of the total. Land Registry data lets us distinguish between “detached”, “semi-detached”, “terraced”, “flat/maisonette” or (residential or non-residential) “other”9. The categorisation is not perfectly accurate and very incomplete – most residential properties are not identified at all by our current approach (and more on this below).
There is a reasonably clear trend: detached properties are almost twice as likely to be in the “red” category (company disclosed as the hidden beneficial owner, hiding the real owner):
Which countries are the worst offenders?
Jersey is by far and away the jurisdiction with the largest number of companies holding English/Welsh real estate. So it’s unsurprising that Jersey also has the largest number of companies which are hiding their ownership (you can hover over the categories to see the full data):
It’s more meaningful to look at the percentage of real estate holding companies in each country which are potentially non-compliant:
Looking at the worst offenders:
Saudi Arabia has a small number of companies holding English/Welsh property (only 260) but 90% are non-compliant. This is disproportionately down to just a small number of proprietors. Mohammed A.Al-Faraj Corp. for Trading & Contracting owns 125 properties in the UK but isn’t registered with Companies House. Another, Takamul Economic Solutions owns 37 properties but isn’t registered. And International Capital Real Estate Company LLC owns 29 but isn’t registered. The links in this paragraph should take you directly to the relevant view in the webapp (if you are registered and logged-in).
Singapore has 2,114 companies and 70% are non-compliant. That alarming statistic is, however, mostly driven by just one company – Profitable Plots PTE. It holds 1,000+ properties in the UK but hasn’t registered with Companies House, probably because its directors were jailed in Singapore for financial fraud.10 So it would be unfair to draw any wider conclusions about Singapore.
Often ownership is hidden by mistake – people don’t understand how the rules work. But it seems that sometimes very aggressive legal interpretations are being taken.
We can illustrate this by looking at the statistics for each category in turn, and then reviewing the specific details of the most expensive properties in each category.11
Red – ownership hidden behind a foreign company
The red category properties are where there’s no individual beneficial owner declared, just a company. In most cases this is unlawful.12
We can get a sense of the varied reasons why companies are in the “red” category if we use the webapp to look at the most expensive properties in that category.
The most expensive “red” property is part of Arundel Great Court and the Howard Hotel, 12 Temple Place, London. It was acquired for £793m on 10 October 2025 by a Jersey company, Store Holdings South Ltd. That company gives its beneficial owner as another Jersey company, Store Holdings Group Ltd. That looks like a breach of the rules – the registered beneficial owner should usually be an individual. It therefore seems likely that the true owner is being hidden; perhaps accidentally, perhaps intentionally.
The second most valuable is Christian Dior’s £164m flagship shop at 161 and 162 New Bond Street, together acquired for £313m . It’s owned by a Luxembourg company which registers its beneficial owner as LVMH SE. The LVMH group is listed; however the parent/listed entity is LVMH Moet Hennessy Louis Vuitton SE – so that’s the entity that should be listed as the beneficial owner. However there may be a larger error than this. 65% of the voting shares in LVMH are controlled by the Arnault family. Query if in fact Bernard Arnault should be listed as a beneficial owner.
Next, a mews in Kensington, acquired for £194m in 2019 and owned by an Abu Dhabi company, Medco Holding Ltd. It registers its beneficial owner as International Capital Trading LLC. But this company isn’t listed; it shouldn’t be given as the beneficial owner. International Capital Trading is a bona fide business, but it’s hiding its true owner. That’s not permitted.
City landmark 1 Poultry, acquired in 2025 for £110m. It’s owned by One Poultry Trustee No. 1 Limited and One Poultry Trustee No. 2 Limited. The first registers two further trustees as its beneficial owner; the second registers none at all. Until 2025 it was owned by Hana Alternative Asset Management; it’s now owned by unnamed Korean institutional investors. Given the wide ownership, it’s probably correct that no individual beneficial owner is registered.
A £108m logistics unit in Chiswick is owned by two trustees in the Boreal group. Apex Group trustees are registered as beneficial owners, together with a UK company, a Jersey company and “The Asticus Foundation”. The Jersey company and the foundation don’t appear to be registrable beneficial owners; they should not have been registered. Boreal is owned by four individuals – query if they should have been listed.
Mayfair properties acquired for £94m in 2023 by a Jersey company, which registers its beneficial owner as a Bermudan company, Brookfield Wealth Solutions Ltd. That Bermudan company should not have been registered. Brookfield is widely held, and so probably the correct answer is that nobody should have been registered. The incorrect registration of the Bermuda company therefore provided more transparency than if Brookfield had followed the technically correct approach.
When we see these kinds of questionable registrations for the most valuable and highest profile companies, it suggests that non-compliance is widespread.
Grey – failed to register
The grey category properties are where the proprietor simply hasn’t registered with Companies House:
The most common reason why a company is in this category is that it broke the law and didn’t register with Companies House. There are other reasons:
It did register, but with a typo in its name, so the app doesn’t match it.
It changed its name, but didn’t update its Land Registry entries.13
Our code has made a mistake and failed to match when it should have done.
Again looking at the most expensive properties:
A mansion at 4 Grafton Street in Mayfair, bought in 2018 for £69m and one of the most expensive houses in London. It’s registered to 4 Grafton Street Limited, but no such company is registered with Companies House. The property is said to be owned by a German national. This looks like a straightforward failure to register.
Another grand house, 19 Hill Street, sold for £52m in 2008. It’s registered to a “Hill International Investments Inc” which hasn’t registered with Companies House.15
Amber category properties are where the overseas entity says it has no beneficial owners:
Sometimes a company has no beneficial owner under the overseas entity rules. This could be the case, for example, if there’s no one person who holds more than 25% of the shares, more than 25% of the voting rights, or exercises significant influence or control over the company. Often very valuable properties genuinely have no single beneficial owner, because they’re owned and controlled by widely held entities like pension funds, private equity funds and other similar arrangements. In such a case it is correct to file with the register of overseas entities on that basis, and list the “managing officers” instead.
However we again see a pattern of questionable registrations. Take the top five most valuable amber properties:
The W Hotel at Leicester Square (10 Wardour Street) is owned by a Jersey company, Arctic Leicester Square Ltd, which claims to have no beneficial owner. The hotel is owned by the Al Faisal Holding Company of Qatar, which appears to be controlled by Sheikh Faisal Bin Qassim Al Thani. It’s therefore unclear why he isn’t registered as the beneficial owner.
It’s no coincidence that three out of these five hold the real estate in Jersey – as the chart above shows, Jersey is by far the most significant offshore centre for holding UK real estate.
Our review suggests a significant number of private equity and fund management companies aren’t complying with the rules. But there are exceptions.
Blackstone are the world’s largest alternative asset management. They register their founder and CEO, Stephen Schwarzman, as the beneficial owner of over 1,000 properties. Blackstone is listed, and many businesses in this position therefore only register the listed company as the beneficial owner. But Blackstone have gone a step further, and asked: is there a person who in practice exercises significant influence over the company? The answer to that question was that there is such a person – Stephen Schwarzman. Blackstone appear to be one of a minority in the real estate industry who apply the rules properly.
Blue – only trustees declared
Blue category properties are where the only beneficial owners declared by the overseas entity are trustees. Transparency International has previously identified a widespread failure to disclose the true beneficial owner of trust structures. We believe the position is even more serious.
It is generally correct to identify trustees as beneficial owners (even where they are companies). However, in most situations where a trustee owns property, it in practice acts at the behest of another party. That makes sense – not many people would put property in trust if they wouldn’t be able to influence the trustees. And this is the key point: an individual with significant influence/control over the trustees’ activities is specifically required by the rules to be registered as the beneficial owner. However, in almost all cases, they are not. The trust industry appears to be systematically ignoring the law.
Here’s the breakdown by country:
The top five commercial properties owned by trusts:
The Intercontinental Hotel at the O2 was acquired in 2016 by a Jersey company for £400m. The Jersey company names two trustees as its beneficial owner – and no human beneficial owner. The hotel is reported to be owned by the Arora Group, controlled by Surinder Arora. The Arora Group itself says it has no beneficial owners; it is not obvious why that is correct. If Mr Arora is the controller of the Arora Group then we expect he has significant influence over the trustees, and therefore should be named as a beneficial owner of the Jersey company.
Land in Watford was acquired in 2019 for £250m by two Jerseycompanies. Both companies list only Croxley Master Trustee Limited as their beneficial owner. We expect the trust is in practice acting at the behest of the ultimate owners of the structure. A planning document suggests the ultimate owners may be the BAE Pension fund and Goldman Sachs. Pension schemes are generally exempt from beneficial ownership disclosure, but if Goldman Sachs has a 25% interest then it should have registered its listed US parent as a beneficial owner.
Mulberry’s flagship store at 50 New Bond Street was acquired in 2021 for £198m by twoJersey trustee companies. The building is owned by the Al Khashlok Group, and the founder of the group, Dr Awn Hussein Al Khashlok is registered as a director of the companies. So it’s surprising that the Jersey companies claim to have no beneficial owner. We expect in practice they are under de facto control or, at least, significant influence by Dr Al Khashlok.
An office building in Aldgate was acquired in 2019 for £183m by twoJersey trustee companies, which claim to have no beneficial owners. The directors are employees of Ogier, the Jersey law firm. The building appears to be really owned by Singapore investment company City Developments Limited, which is 43% owned by member of the Hong Leong group, a family owned conglomerate. The question is whether there are individuals who in practice have significant influence or control over the trustees.
280 Bishopsgate was acquired in 2020 for £173m by two Jerseytrustees, which appear to be operated by fund administrator Langham Hall. We expect they in practice are under the de facto control and influence of the ultimate owners, CBRE Investment Management, King Street Real Estate GP, L.L.C. and Arax Properties. Arax says it’s controlled by one individual. CBRE is controlled by its listed parent CBRE, Inc. We don’t know which, if any of King Street’s partners control it. However it’s reasonably clear that CBRE and Arax’s owner should be listed as beneficial owners of the Jersey trustees.
The top six residential properties owned by trusts:
9 Holland Park in London (Richard Branson’s former house) was acquired for £53m in 2016 by a BVI company. The beneficiaries are listed as two Isle of Man trustees. In practice we expect an individual has significant influence/control over the trustees’ activities and should be registered – but isn’t. So we don’t know who really owns the property.
Just around the corner is 8 Abbotsbury Road, acquired for £21m in 2016 by a Bahamas company (which is overdue filing its Companies House return). The beneficiary is listed as a Cayman Islands trustee, again holding for an unknown person or persons.
Apartment 51, 17 Park Crescent, London, was acquired for £18m in 2021 by a Delaware LLC. The registered beneficiary is Robert Frederick Smith. The exact same ownership structure is used for other apartments in the same building, acquired for a total of £60m in 2020/21. Robert Smith appears to be the American investor (the date of birth matches, and he uses the same correspondence address for other companies that he owns). However Mr Smith is registered as a trustee, rather than owning in his own right. Someone presumably has control of the trust – and they’re not registered (it may well be Mr Smith himself).
Flat 1, 33 Chesham Place, London was acquired for £16m in 2017 by a BVI company. The registered beneficiary is a Singapore corporate trustee holding (once again) for an unknown person or persons.
Why are trustees not complying with the law?
There are two factors here:
Most of the commercial property above is likely owned by “Jersey property unit trusts” (JPUTs). These are legitimate investment vehicles used for commercial real estate investment.17 However these funds are typically directed/managed by an investment manager of some kind: where that investment manager has beneficial owners, they should be listed as beneficial owners of entity owning the property. They almost never are.
The other properties will be held by private trusts of some kind, typically discretionary trusts established for financial planning and/or tax reasons. Few if any people put property into trust without a way of ensuring the trust does what they want. Typically this is achieved by the settlor sending a “letter of wishes” to the trustee which they are not legally required to follow, but in practice always do. In our view this is “significant influence” and/or de facto control, and so the settlor should be registered. However we see numerous discretionary trusts where no settlor is registered. Take, for example, Cove Estates Ltd – an Isle of Man company which holds five titles in Cornwall. Its beneficial owner is declared to be Knox House Trustees Limited, a company owned by Douglas Barrowman. However there is no entry for Barrowman or whatever other persons have significant control/influence over the trustees (and therefore over Cove Estates Ltd). That is very unlikely to be correct.
We can get a sense of how widespread this is by looking at the number of properties held by the big professional trustees, and counting how mnay times we see a true individual beneficial owner disclosed, and how many times we don’t.
Our analysis shows 201 professional trustees registered as beneficial owners of UK properties. Of those, 181 have never once disclosed a true beneficial owner. This chart shows the other 20 trustees, who’ve disclosed a true beneficial owner at least once, and the percentage of their properties where full disclosure was made:
Looking at the trustees that appear to top this chart, and therefore be the most compliant:
JTC Trustees appears to have a high level of correct reporting because their Companies House entry discloses they are held by JTC plc, a listed company. That is correct disclosure of their own position; however they don’t appear to ever disclose individuals as beneficial owners.
Line Trust Corporation Limited appears to have a high level of correct reporting because their properties in London’s East End often show a Gibraltar individual, Douglas Ryan, as a beneficial owner.
Chancery Trustees and Oak Trust (Guernsey) Limited seem to genuinely disclose individual beneficial owners in a material number of cases, making them unusual in the trust market.
Standard Bank Offshore Trust Company Jersey Ltd discloses two individuals as beneficial owners, but they appear to be employees of Standard Bank. The true beneficial owners are not disclosed, so far as we can see.
Bad as this all is, our analysis likely under-estimates the secrecy which is being employed by trust companies. There’s evidence that the trust companies are using UK corporate beneficiaries to “block” the beneficial ownership rules. Take an example: this land in Grimsby. It’s owned by two Apex Jersey trustee companies. The beneficial owner is stated to be Apex Consolidation Entity Ltd, a UK company which claims it has no beneficial owners itself. What’s really happening is (we expect) that the land is under the de facto control of the settlor of the trust under a letter of wishes or similar arrangement – the settlor should be registered as a beneficial owner (but isn’t). However because there’s a UK incorporated company declared as beneficiary, our webapp assumes all is well and puts the property in our “green” category.
Is there a “trust loophole”?
A key reason why there’s so little disclosure of the true ownership of these trusts is the widespread belief – almost universal in the world of professional trustees – that there’s a significant loophole in the rules.
The “loophole” looks like this:
Someone – let’s say Vladimir Putin – wishes to hide their ownership of a valuable house in London.
Mr Putin arranges for the house to be acquired by Offshore Trustees Ltd on his behalf.
Offshore Trustees Ltd is a professional trust company in Jersey owned by individuals unrelated to Mr Putin. Like many such companies, it holds hundreds of properties for hundreds of different people.
Offshore Trustees Ltd holds the property on discretionary trust for Mr Putin, in practice always acting as he requests (under a “letter of wishes”).
Or to put it in a structure diagram:
Standard Transparency
🏠
UK Property
🏢
Overseas Company
(Legal Owner)
👤Real Individual Registered as beneficial owner On Register
The “trust loophole”
🏰
UK Property
🏢
Overseas Company
(Legal Owner)
⚖️Offshore Trustees Ltd Registered as beneficial owner On Register
“Letter of wishes” / Significant influence over ownership of house
🕵️Vladimir Putin Actual Controller Hidden / Not on Register
Offshore Trustees Ltd claims it’s technically correct under current law for the owners of Offshore Trustees Ltd to register as the beneficial owners of Offshore Trustees Ltd, and for there to be no entry for Vladimir Putin, even though he’s the one controlling the property. That is the position the corporate trustees we spoke to are taking. The justification is that Mr Putin has no significant influence or control over Offshore Trustees Ltd as a whole, only over a small part of its activities (its ownership of his house).
This, however, completely undermines the point of the register. 18
It is also at odds with the wording of the legislation. Mr Putin’s has his own trust – the only property in the trust is his house (he’s unlikely to be “sharing” a trust with Offshore Trustees Ltd’s other clients, and there would be legal and tax complications if he did). Mr Putin has significant influence or control over the “activities of the trust” even though he doesn’t have significant influence/control over Offshore Trustees Ltd itself. The rules specifically make that distinction, and look at the activities of the trust. This means Mr Putin should be registered as a beneficial owner. We understand the Department for Business and Trade believes this is the correct approach, and therefore the “loophole” does not exist. We agree – that’s the answer consistent with both the spirit and letter of the legislation. However, both our discussions and the evidence above suggest that the trust industry does not agree.
It would be helpful if the Department of Business and Trade could make this point explicit in the guidance. If not, the law should change to put the point beyond doubt.19
Why does it matter?
There is nothing inherently suspicious about a foreign entity holding UK real estate. For example, if you zoom into Canary Wharf, you’ll see Citibank’s UK headquarters, which is held (unsurprisingly) by Citibank. If a foreign person is investing in UK real estate then it is only natural it holds through a foreign company, and UK tax rules will now tax it in broadly the same manner as a UK company – so there is no avoidance here.20
Some people have presented the raw numbers of overseas real estate holders as some kind of problem – that is in our view wrong and misleading.
However it is absolutely a problem when the true ownership is hidden.
In most of the colour category examples above we were able to establish the true ownerships of the largest properties. That’s because they were large properties and their acquisition was often publicised. For smaller properties, and residential properties, this is usually not possible. So the lack of correct disclosure, which was a slight headache for £200m properties, becomes a significant barrier for (say) £10m properties. This creates a series of problems:
Tax. Where a foreign individual owns a “property rich company” holding UK real estate, and sells that company, he or she will in most cases be liable for UK capital gains tax. But if the individual is never disclosed as the beneficial owner, HMRC have no way to know if that sale took place. Each grey, red and blue company represents potential UK lost tax. And of course the owner may also be failing to pay foreign taxes – property is particularly well suited to tax evasion when beneficial ownership can be concealed.
Sanctions. Our app displays (in purple) properties owned by sanctioned individuals and entities. The number of such properties is extremely small – 38. We don’t believe this is correct. We spoke to sanctions experts who expected there would be hundreds or even thousands of UK properties owned by sanctioned Russians – but because they hold via red, grey and blue category companies, we don’t know who they are, and we don’t know what they hold.
Money laundering and corruption. UK property is an excellent safe way to park large amounts of money if you’ve stolen it or are looking to hide it – and the Government’s economic crime plan says that £100 billion laundered through and within the UK. The register of overseas entities should prevent that – but all its flaws mean that in practice it doesn’t.
How to enforce the rules
People are going to continue to ignore the overseas entity rules until there are clear consequences for breach. Only fourteen fines were collected in the two years since the rules were introduced (our of 444 issued).
We would suggest that DBT consider the following steps as part of its next review:
The Department of Business and Trade and/or Companies House should issue a notice warning the trust industry about the widespread failure to register true beneficial owners.
Companies House should start using their civil penalty powers at scale, sending formal notices to proprietors with questionable (or absent) registrations,21 and requiring further information. If there is no satisfactory response, Companies House can now place a warning notice on the Companies House register and a restriction on the Land Registry title (preventing mortgages being obtained or the property being sold).
Where there are good grounds to believe the law has been broken (for example a simple lack of registration, or inadequate response to the formal information notice), Companies House should send formal warning notices and then, if ignored, issue penalty notices (which scale with property value).
This would likely result in many thousands or penalties being issued. History suggests most would be ignored. We’d suggest expanding Companies House existing powers so that a restriction can be placed on title where penalties are not paid.
Companies House should select test cases, with particularly clear facts, for prosecution. The officers of a company commit a criminal offence if it fails to register with the register of overseas entities – with up to two years’ imprisonment and an unlimited fine. About 8% of all properties are in this category. We’re not aware of any prosecutions. It’s rational for people to pay little attention to these rules unless there are clear sanctions for those that intentionally or negligently fail to comply.
It’s always been the case that rules that aren’t enforced may as well not exist.
Limitations and methodology
The code that analysed the Companies House and Land Registry data, and then created the webapp, can be found on our GitHub here. It’s all open source, and everyone is welcome to use/copy/adapt the code and the data, provided they fairly attribute it to us.
The basic approach is as follows:
Go through the Land Registry’s dataset of overseas companies that own property in England and Wales (“OCOD”).
The property type isn’t listed on the overseas company dataset. We therefore cross-check against the Land Registry’s separate price paid dataset, which includes a not-very-reliable flag for the type of property. The price paid dataset doesn’t include the title number, so we cross-check the two datasets first using the price paid and the postcode, and then using fuzzy matching on the address. This is far from completely reliable, and even then only matches a small proportion of the overall properties – properties sold since 1999, with a “price paid”, and where the correct “property type” box was ticked. Further work could be done to improve this.
Use the Companies House API to search for each owner (registered proprietor) on the register of overseas entities. This is complicated by numerous inconsistencies in formatting, spelling, etc.
If the proprietor can be found, then use Companies House’s API again, to identify its beneficial owners, their category (UK company, offshore company, individual, trustee) and the nature of their ownership.
Geolocate the property, the company, the registered proprietors and their beneficial owners, sanity-checking to catch obvious mismatches. Geolocations are by postcode and Google’s geocoding api and therefore will be approximate.
Categorise each owner, and each property, into the colour categories above: green only when every proprietor has at least one individual non‑trustee controller; amber where there’s no registered beneficial owner, grey where we can’t find the named proprietor on Companies House, blue where all the registered beneficial owners are trustees, and red where the only registered beneficial owners are offshore entities (excluding those we’ve found on databases of listed companies).22
This is not straightforward due to the poor quality of the data:
There are many wrong and misspelt company names. Sometimes the errors are small, e.g. Al Jameel Holding Ltd is listed as the proprietor of fourteen properties, but there’s no such company at Companies House. The actual owner is probably Al Jameel Holdings Ltd (with “Holdings” in plural). Similarly, the Pokemon Company International. Inc, which appears to have misspelt its name “Pokermon” on its land registry entry. We show these as “grey” – unregistered owners, as that is both technically correct and avoids us making arbitrary value judgments.
Minor errors abound. Even major companies like Hutchison Ports have typographical errors in their entries – writing “Je49wg” instead of “Jersey”. Or the Pokemon Company International. Inc, which misspelt its name “Pokermon” on its land registry entry.
Where a company is in the Land Registry data but not on Companies House then we check for minor variations; if we can’t find them, we mark it as unregistered. It’s hard to know where the boundary lies between typographical error and failure to register. For example, one overseas entity on the register is “Bontex & Luis Inc”. There is no such company. There is a “Bontex & Luis Inc Ltd“, but that’s a UK company not an overseas entity (so this is unlikely to be a mere typo). We’ve marked Bontex & Luis Inc as unregistered.
In some cases a company’s name has changed but the register wasn’t updated. We try to catch this.
Locating the address isn’t easy. Where there’s a correct postcode we can easily use the ONS postcode list – although many postcodes are large and only give an appropriate result. About a quarter of the approximately 100,000 properties on the register list an incorrect postcode, or no postcode. In these cases we use the Google geocoding api, but when that gives a wrong location (which it often will if the address is mangled), then our location will be wrong.
There are then obviously wrong addresses – e.g. overseas entities giving their address as Guernsey followed by a London postcode.
If you do identify any errors then please get in touch.
The detail is set out in the code published on our GitHub. Our approach necessarily involved a series of judgment calls, and errors are inevitable. Nobody should make any conclusions about particular companies without checking them carefully by hand.
We’d be delighted if others find our code useful, but unfortunately we’re not able to provide any support on installing or using the code.
The first is where companies have been placed on the Land Registry’s list of UK companies owning property in England and Wales rather than the list of overseas companies. We have undertaken an initial analysis, and found some entities that should be on the overseas entity list:
Cases where the stated entity type suggests it’s a foreign company. There are fourteen entities with names ending in “Inc”, ten ending in “SA”, one “NV”, nine in “Corporation” and ten “PTE Ltd”. Many of these are likely innocent errors, but one entry looks potentially fraudulent – an “Apple International SA” owning small plots of land in Durham.
Cases where the given company name says explicitly it’s a foreign company – for example one entry on the register is “CPS Investment Management Limited (incorporated in British Virgin Islands)”.
Financial institutions whose name suggests they are foreign entities: Royal Bank of Canada Trust Company (Jersey) Limited, HSBC Trustee (Singapore) Limited, Kleinwort Benson (Guernsey) Trustees Limited.
Foreign governments: the Hellenic Republic and the Federal Government of the United Arab Emirates. The Hellenic Republic entry shows it owning the Greek Embassy – so this is clearly the real Hellenic Republic which an administrative error misclassified as a UK company. The UAE is listed as owning a modest detached house in Pevensey – we don’t know if that’s misclassification or fraud (i.e. someone using the UAE’s name).
There are other data problems: there are at least thirteen individuals on the list of UK companies.
It’s likely that the initial error in these cases was made by the company/individual buying the property (or their conveyancer).23. The Land Registry says they don’t validate company numbers (which is fair enough), but it appears that they also don’t undertake basic checks of the list.
The above errors are not hugely significant, and probably responsible for no more than 100 proprietors being missing from our analysis.
The second category is more mysterious.
Land Registry records show that a company called Uart International SA acquired a £12m house in Oxfordshire in 1992. However it’s not on the Land Registry’s list of overseas entities holding English/Welsh real estate (or the Land Registry’s list of UK companies). One possibility is that this is an accident (e.g. the company accidentally declared it was an individual). Another is some kind of Land Registry data error.
Uart International SA did comply with the register of overseas entities rules – it registered with Companies House as a Panamanian company. It is concealing its true beneficial owner – likely unlawfully, it declares a BVI company, Shorndean Developments Limited, as its beneficial owner (plus a Cyprus trustee company).24
We don’t know if the case of Uart International SA is a strange one-off error, or the sign of a more systemic problem. It’s not possible to conduct reverse-searches of the Land Registry, so at present we have no way to examine this question further. The Land Registry, on the other hand, could easily search its register for obvious foreign entity names which have not been correctly registered – we expect this would take little more than a simple database query.
However we do know that Uart International SA is a very significant case, because – as the BBC has reported – the Pandora Papers show that Shorndean Developments Limited is ultimately controlled by Vladimir Chernukhin, the former Russian Minister of Finance.
Scotland and Northern Ireland
Our analysis is limited to England and Wales for the simple reason that HM Land Registry makes data for England and Wales available (but see below), but its Scottish and Northern Irish equivalents do not.
There is a Scottish register kept by Registers of Scotland but, for reasons we do not understand, Registers of Scotland told us they prohibit any use that (like this one) makes the full data available for public viewing, and they also require us to have “appropriate security and monitoring controls in place in relation to the data you provide online to ensure customers use it appropriately”. There’s also a requirement that we don’t use the data in any way that could affect Registers of Scotland’s reputation. We can’t agree to this.
We aren’t aware of any arrangements for publishing the Northern Ireland register.
This all has consequences. It’s hard enough to see who is the ultimate owner of UK property, given the widespread non-compliance. But with Scottish property we can’t even start. So, for example, Bagshaw Limited is an Isle of Man company owning property in Glasgow and which was reported to be ultimately owned by Douglas Barrowman and Michelle Mone. There is, however, no easy way to investigate that from publicly available sources.25
HM Land Registry’s impossible licensing terms
The only reason this webapp exists is that The HM Land Registry makes the dataset (of overseas companies owning property in England and Wales) freely available. This is fantastic. However there’s a problem: the Land Registry’s licence contains provisions that require us to collect the name, email address and IP address of all users, and provide them to the Land Registry if for their “audit” purposes:
This is unacceptable from a privacy standpoint, and in the view of the GDPR specialists we spoke to, clearly contrary to GDPR. We’ve no idea why a public body would act in this way.
It also makes no sense. Anyone can go to numerous websites that show every property in the UK, its precise address and estimated current price. Or anyone wanting the overseas entity data can download the underlying Land Registry data directly, as one large spreadsheet, by entering a name verified with a credit card (real or stolen). If you’re a fraudster who wants to quickly identify valuable properties then that spreadsheet is much more useful than our webapp. There is in practice no way to tie a particular fraudulent use of the data with a particular download.
By contrast, our webapp is an awkward tool for criminals, and a convenient tool for journalists, researchers and members of the public. The idea that users of this webapp are a particular fraud risk, justifying routine collection of personal data and handing it over on demand, is indefensible.
We have told HM Land Registry that we will comply with the licence terms so far as they are lawful. UK GDPR overrides any contractual term that would require unlawful processing of personal data. In particular:
We will not provide HM Land Registry with users’ personal data for general “audit” purposes. If HM Land Registry wants to audit compliance, we can provide appropriately redacted records (including no personal information.
We accept that HM Land Registry has a legitimate interest in preventing or detecting crime. But that does not justify handing over everyone’s personal data. We will only disclose personal data where HM Land Registry makes a specific, particularised request and it is “necessary” and therefore lawful under GDPR. It is not clear to us how such a request would ever be necessary and therefore lawful.26
That is why registration is required. We are collecting the minimum personal data needed to run the service and to meet the licence requirements so far as we lawfully can. That includes collecting names, email addresses and IP addresses, but we will absolutely not pass that information to HM Land Registry without a very convincing, and lawful, rationale. We will not pass that information to any other party without a court order (which we would resist). We explain this in our Privacy Notice, and we will be transparent about any request for access we receive.
We do not track how users are using the webapp – and technically we cannot, because the webapp runs entirely locally on the user’s device. So we know if a particular user accessed the webapp at a particular time, and the IP address they accessed it from (unless they are using a proxy or VPN), but we do not know anything else.
We have explained the above to HM Land Registry and suggested they reconsider their licensing terms. They have asserted that their terms are “fair” and “lawful” but haven’t been able to explain why providing them with complete data on all users, their contact details and IP addresses for “audit” purposes is “necessary”.
We don’t know why a public authority is trying to enforce oppressive data collection terms, and we are referring the matter to the Information Commissioner.
You are free to use the map for any purpose – if you find something interesting then we’d be grateful if you could credit us, but you don’t have to.
Thanks to T, C, O and L for most of the analysis and coding, to K1 for specialist ROE input, and to B and A for their GDPR expertise. Thanks to K2 for their expert review. The original concept and coding of our 2023 map was by M. With thanks to CAGE and Transparency International for all their previous work in this area.
Sometimes more than one category apply, for example there is a trust owner and an owner which is a (non-trust) corporate. Our code prioritises the most “serious” category, being broadly red -> grey-> amber -> blue ↩︎
CAGE converted roughly 90,000 titles into an estimated 152,000 properties using a title-to-property conversion, which is a different unit of measurement; they also use somewhat different categories to us, so our counts are not directly comparable with theirs. ↩︎
Note that this is a count of overseas entities/proprietors not titles/properties. ↩︎
Because otherwise their security will be prejudiced; property owned by an overseas entity that isn’t registered can’t be sold. ↩︎
We only use data from 2023, 2024 and 2025 because it’s hard to account for asset price inflation in earlier years. ↩︎
For two reasons. First, if one buyer acquires multiple properties in the same transaction then often each title shows the overall purchase price. So a simple average would massively over-estimate the price paid. Second, in other portfolio cases there could be a transaction that is commercially for £1bn, but split with different values across different properties. We treat this as one transaction. Our deduplication is heuristic and may both miss duplicates and remove genuine distinct purchases, affecting the average price and therefore the scaled total. ↩︎
Most significantly the underlying data is affected by selection bias: high-value commercial and residential property is often transferred via corporate share sales rather than registered land transfers, meaning many valuable assets never appear with a contemporary price on the Land Registry at all. Whilst sales are supposed to always include the price paid, for some very valuable properties people (unlawfully) fail to do so. These factors would tend to make our estimate too low. On the other hand, the result is susceptible to a few very high value transactions – and this would tend to make our estimate too high (but excluding those transactions would create probably a larger source of error). Conversely, the subset of transactions that do appear in recent years may not be representative of the historic stock as a whole (some very valuable property is never sold; some property with a very low value is never sold) – we don’t know what the overall impact of this factor would be. An additional two factors potentially under-estimate value: we are ignoring inflation, and we’re ignoring post-acquisition improvement of properties. ↩︎
A mixture of land, commercial property, mixed use, and non-standard dwellings ↩︎
There are exceptions for Governments and public authorities, UK companies, companies whose shares are listed on a regulated market in the UK, EU or certain other jurisdictions, and corporate trustees. All of these are registrable beneficial owners that should properly be on the register (although that doesn’t prevent any individuals who also have significant influence/control also being on the register). We’ve done our best to screen those out, so the red properties are in most cases companies that should not be on the register. However there will inevitably be errors. Please look at any specific case in detail before jumping to conclusions. ↩︎
There are some surprising examples. Barclays Wealth Trustees (Jersey) Limited owns five properties but isn’t registered with Companies House. The reason seems to be that it changed its name to Zedra Trustees (Jersey) Limited but didn’t update the Land Registry. ↩︎
For unknown reasons, the original Companies House registration in 2022 said the company was incorporated in Gibraltar (even though the land registry entry said it was a Jersey company). This was then updated to Jersey in 2024. ↩︎
The benefit of a JPUT is that investors can own property through a “tax transparent” fund – meaning investors are taxed directly on rental income, rather than there being two levels of taxation, but without the stamp duty land tax complications that would follow from using a partnership or LLP. ↩︎
There was a change of law last year to require simple trusts/nominee arrangements to be registered – but it doesn’t apply to settlements/discretionary trusts. There are also separate rules requiring overseas entities to registerinformation regarding trusts and their settlors and beneficiaries with Companies House. This information is not made public. In principle it can obtained by applications to Companies House, but in practice it is difficult or impossible to make such applications, because you have to know the name of the trust (information that usually only the parties involved will possess). ↩︎
There is a further, deeper, problem. Even if Vladimir Putin was registered as a beneficial owner, he’d be registered as a beneficial owner of the trust company. We wouldn’t have anything tying him to his actual house. Fixing this requires more significant changes to the design of the overseas entity regime. ↩︎
The position used to be different. Foreign companies holding UK real estate have always been subject to UK tax on their rental income, but gains used to be exempt. That changed in 2015 for residential real estate and in 2017 for non-residential real estate. There also used to be an inheritance tax benefit for non-domiciled individuals of holding UK real estate through a foreign company; that went in 2017. There is a brief summary of some of these issues here. It is therefore often the case that UK land is held offshore for historic tax avoidance reasons that no longer apply, but extracting the land from the current entity owning it is more cost/hassle than it’s worth. ↩︎
We anticipate that Companies House and HM Land Registry, with their enhanced data access, could greatly improve on the approach we adopted for this report. ↩︎
We also exclude offshore entities that are themselves registered with Companies House (e.g. because they are proprietors of different properties) and declare individuals as beneficial owners. However there is a source of error here, because we don’t make this check recursive. So if, for example, a property is held by proprietor A, for beneficial owner B, which is an offshore entity registered with beneficial owner C, which is another offshore entity registered with an individual D as beneficial owner, our code will show this property as “red” even though it really should be “green”. We haven’t checked if there are any real cases like this – there may well not be. ↩︎
Because it’s not on the Land Registry entity lists, it’s impossible to tie the company to the Oxfordshire property without (as we did) looking at the individual Land Registry title. ↩︎
i.e. because if a crime was committed using Land Registry data, how would HM Land Registry suspect one of our users, as opposed to anyone else who downloaded the dataset? And how would our user data, merely consisting of times, email addresses and IPs, enable identification of a suspect? ↩︎
Last week we published a report on how a small number of tax barristers facilitate tax avoidance schemes that are, in our view, more properly described as tax fraud. The barristers design the schemes, and/or issue opinions that the schemes work, despite the dismal history of such schemes in the courts over the last 25 years. They achieve this by making unrealistic assumptions of fact and ignoring inconvenient laws and judicial principles.
After we published our report, we wrote to the Bar’s regulators, the Bar Council, and other representative bodies, as well as the most wellknown sets of tax chambers.
The good news is that the regulators and the Bar Council are taking this seriously, with draft guidance on the way. However, the leading tax chambers are in denial, with only one (Gray’s Inn Tax Chambers) providing us with comment before publication of this article. Update: other chambers responded after publication, and their comments are included below.
Here are the responses in full.
The regulator
The Bar Standards Board is the disciplinary body for the barristers‘ profession. We’ve been speaking to them on these issues since early 2025. They told us they’re working on tax guidance for the profession and will be consulting on it shortly.
A spokesperson for the BSB told us:
The Bar Standards Board will always and have always assessed the reports we receive or other information of which we become aware suggesting that barristers are facilitating tax fraud. We are also currently undertaking work on professional ethics and considering further guidance for the profession on how our Core Duties apply to the issues highlighted in the report.
The Legal Services Board is, essentially, the regulator of the legal regulators. It regulates the Bar Standards Board, the Solicitors Regulation Authority, and other similar bodies regulating legal professional services. They told us:
The Legal Services Board (LSB) expects all legal service regulators to ensure that the professionals they oversee act in the public interest and uphold the highest standards of integrity. We take seriously the suggestion that a small number of barristers may be providing legal opinions that facilitate tax schemes which may be fraudulent.
“It is the role of the Bar Standards Board (BSB) to ensure that barristers comply with their professional duties, which include acting with honesty, integrity, and independence. Where there is evidence that these standards are not being met, the BSB must take appropriate action.
“We will continue to hold the frontline regulators, including the BSB, to account for their performance. As part of our focus on professional ethics and the rule of law, we are also developing new expectations for regulators to help ensure that those they regulate uphold their professional ethical duties.
The representative bodies
The Bar Council is the Bar’s professional body and governing council.
They told us:
The report calls for the Bar Standards Board to make it clear that it is a disciplinary matter for a barrister to provide an opinion which facilitates a tax scheme that has no realistic prospect of success, specifically where the assumptions in the opinion would breach a barrister’s core duty to act with honesty and integrity. The Bar Standards Board is independent of the Bar Council. However, the Bar Council would support such a statement from the BSB. In our view, if a barrister were to give tax advice which facilitated a tax scheme which they knew was doomed to fail, this would breach several of the core duties in the BSB handbook. Additional rules are not required because this would already be a breach, but the Bar Council would support such a reminder from the BSB. We understand that the BSB is planning to consult on these issues and we will engage fully with the consultation.
The Revenue Bar Association is the professional association for tax barristers. Their response:
The RBA does not condone the actions of counsel who give advice which they know to be wrong or are reckless as to whether it is wrong. We are clear that this would be a breach of the Bar Standards Board’s (“BSB”) Code of Conduct, which mandates that counsel must act with honesty and integrity (Core Duty CD3) and must not behave in a way which is likely to diminish the trust and confidence which the public places in the profession (Core Duty CD5).
We also note that such conduct could amount to a criminal offence, which could be prosecuted by HMRC. Indeed this was pointed out in the RBA’s response to the HMRC’s consultation document, ‘Closing in on promoters of marketed tax avoidance’ (published 26.03.2025, paras 12 and 17).
Where unsatisfactory conduct is identified, the BSB are best placed to obtain the full picture, investigate matters and discipline counsel appropriately. Importantly, they have the power to address issues of privilege and confidentiality which might otherwise impede a fair investigation. We understand that the BSB will, and has in the past, investigate where allegations of misconduct of the type you describe have been reported to it.
The RBA, in contrast, is an association, consisting of members who practice in Revenue law. It does not have the power, means or authority to investigate members or their work. That said, we do not condone such actions and would seek to expel any member who has been struck off by the BSB.
The Chambers
Barristers practice in chambers – unincorporated associations which let the barristers share premises and administration.
We wrote to eleven of the best-known chambers specialising in tax.
We are not aware of the identities of the “small number of KCs and junior barristers”, to which your article refers and, in any event, we do not comment on the behaviour of particular barristers. It is plainly wrong for any barrister to deliver a legal opinion which does not genuinely and honestly reflect their view, or which rests on assumptions known to be untrue, or which deliberately ignores relevant case law or applicable statutory provisions.
After we published this report, 5 Stone Buildings sent us a response:
We are not in a position to comment on the practice of any particular barrister in any other chambers; but we can say that all our members share the view that opinions should reflect the genuine views of the barrister and should be formed on a realistic view of the facts, and a sensible approach to statute and case law. All our members take seriously their duties under the BSB’s Handbook and we would hope that such an approach is shared across the profession.
We would hope that every chambers would be happy to make similar comments regarding the propriety of issuing a false opinion. However, none of the other chambers provided us with any comment.
After we published this article, Old Square sent us this:
The question on which you asked for comment was, ‘whether your Chambers regards the behaviour of these barristers as appropriate’. The reference to ’these barristers’ was to individuals to whom you had referred, but not named, in your previous report, ‘Rogue barristers are enabling a billion pound tax fraud – and the Bar won’t act’, published on 16th January 2026. We note that, in your article of 21st January 2026, you did not publish this question, so that you did not give the relevant question to which we declined to comment. This Chambers does not comment on alleged behaviour of individual barristers.
However, as a Chambers, we condemn any instance in which a barrister gives an opinion in which s/he has no honest and genuine belief; that is based on facts known to the barrister to be false, or as regards whose veracity the barrister is reckless; or that puts forward a legal analysis that the barrister knows to be untenable, or knows to ignore applicable legislation or case-law. Any such opinion would be a breach of the core duties of honesty and integrity. We regard honesty and integrity as forming part of the foundations of the independent referral bar, and therefore as being qualities that every barrister must apply to every instruction s/he is given.
FCTC does not approve of the behaviour of barristers who produce fraudulent opinions or opinions which they know to be wrong or who are reckless as to whether they are wrong or not.
We believe most of these chambers have no members who are involved in issuing false opinions. But we expect almost all their senior members know exactly who is involved.
Our conclusion is that most of the Tax Bar are in denial. We may see attempts to block or water down draft guidance when it’s issued by the Bar Standards Board. That would be a serious mistake.
Photo of the Royal Courts of Justice by sjiong, and from wikimedia.
A small number of KCs and junior barristers are enabling large-scale tax fraud. They do it by providing tax opinions backing schemes designed to “avoid” tax on wages paid to contractors. The schemes have no real technical basis, but the promoters behind the schemes use the opinions as a badge of credibility – and, more importantly, as a shield. When HMRC shuts a scheme down, the promoters point to the KC’s advice, making any criminal prosecution difficult or even impossible.
In reality, these schemes have no realistic prospect of success. All the KC opinions we’ve seen on these schemes rest on assumptions that are plainly untrue, ignore basic principles of tax law, and don’t bother to address statutory rules designed to stop exactly this kind of arrangement. The opinions aren’t there to be right, and aren’t really legal advice at all – they’re just cover.
This report analyses a new case involving one of these schemes, “Purity”. It was backed by a KC opinion – but the scheme was hopeless. None of the remuneration tax specialists we spoke to thought it had any prospect of success. One respected senior tax KC (not involved in these schemes) described the Purity scheme as “incompetent and impossible”. A senior tax lawyer specialising in remuneration tax told us the scheme was “unbelievably bad”. Yet a KC – identity currently unknown – provided an opinion that the scheme worked. Just as KCs have done for the dozens of prior contractor schemes.
The contractors using the schemes never see the KC’s opinion. They usually don’t even realise they are avoiding tax – they’re presented with complex and often deliberately opaque documents to sign, and never told what’s going on. If they were told what was really going on, most of them would walk away.
The whole business is corrupt. It plausibly costs the UK £1bn+ in “avoided” tax and leaves workers facing liabilities they neither understood nor expected. The KCs are facilitating what is realistically tax fraud, and what they should know involves the deception of the individual contractors.
The behaviour of this handful of KCs has been public knowledge for at least fourteen years, but nothing has been done. It’s time for the Bar to confront the small number of rogue barristers whose false tax opinions are enabling fraud. And if the Bar won’t act, Parliament should.
Glossary
KC
A senior barrister appointed as King’s Counsel. In tax avoidance schemes, promoters often use a KC’s written “opinion” as a badge of credibility and (they claim) protection against criminal scrutiny.
Written legal advice from a KC (a “KC opinion”) or a junior barrister.
Common in a normal commercial context, but abused for tax avoidance schemes, providing assurance that a scheme is lawful, even where the underlying facts and law make that implausible.
A person or business that designs, markets and runs a tax avoidance scheme (often through a corporate vehicle), typically taking a fee from the “tax saving”.
A company that employs agency workers and operates payroll for them (PAYE), typically sitting between the worker and the end client. Some umbrellas are used to run avoidance/fraud schemes.
Arrangements designed to pay what is, in substance, earnings via something else (often loans), to avoid income tax and National Insurance. Specific anti-avoidance rules target these structures.
Disclosure of Tax Avoidance Schemes: rules requiring certain marketed avoidance schemes to be disclosed to HMRC early, so HMRC can respond quickly (including by issuing scheme reference numbers).
The General Anti-Abuse Rule: a rule that can counteract tax advantages from arrangements that cannot reasonably be regarded as a reasonable course of action (the “double reasonableness” test).
The modern approach to interpreting tax legislation by looking at the purpose of the statute, not just literal wording. This makes technical avoidance arguments less likely to succeed.
A High Court judgment was published just before Christmas which encapsulates the problem. It concerns an “umbrella company” called Purity Limited.
Umbrella companies
Before the 2000s, people wanting to undertake agency work signed up to a recruitment agency. These days, for reasons that are not entirely clear1, many recruitment agencies have no workers on their books. Instead, the workers are hired by an “umbrella company”, each of which has hundreds or thousands of employees. The end user will be a legitimate business (say Tesco). When Tesco wants to hire temporary workers, it approaches a recruitment company. The recruitment company then asks an array of umbrella companies to bid to provide workers, and usually picks the umbrella company that provided the lowest bid. The umbrella then sorts out admin, and applies PAYE income tax/national insurance.
Here’s how that umbrella company should work:
Compliant umbrella company
From Umbrella Co. to Worker (Label: Net salary)
From Recruitment agency to Umbrella Co. (Label: Fees)
From End User to Recruitment agency (Label: Fees)
From Umbrella Co. to HMRC (Label: PAYE tax & NI)
There’s nothing improper about this structure; but the incentives the whole setup creates are inherently dangerous. The reason: the bidding process. There should in theory be little difference between the bids the various umbrella companies put in to the recruitment company: each umbrella company is paying market wages (often minimum wage), operating PAYE, and has administrative costs and wishes to make a profit. There is not much room for one company to underbid another – there’s only so far administration and costs can be squeezed.
But there is another way: don’t pay the tax. In some cases it’s just simple fraud: the umbrella companies invoice the recruitment company for the wages plus tax, pay the wages to the employees, and never pay the PAYE tax to HMRC:
Fraudulent umbrella company
From Umbrella Co. to Worker (Label: net salary)
From Recruitment agency to Umbrella Co. (Label: Lower fees)
From End User to Recruitment agency (Label: Lower fees)
So a much smarter way to commit fraud is to dress it up as tax avoidance. Claim to have a structure that means that the employees’ remuneration isn’t taxed, and so you can lawfully not pay the PAYE tax to HMRC. The same result as the simple fraud, but with the distinct advantage that, when you’re caught, you can say it’s only a civil tax dispute.
The end user (e.g. Tesco) will have no idea this is going on, and increasing businesses are taking steps to try to police their supply chain – but it’s not straightforward.
These were highly paid workers – about £50/hour (so around £100k/year).
10% of the workers were paid normally.
The rest were paid the minimum wage as a salary; the rest of their remuneration was provided as a “loan” from Purity.3 The claim was that the loan wasn’t taxable; therefore significant tax and national insurance was saved – about £30k per worker per year. Around half of that “tax saving” was retained by Purity as a fee; some of it went to the workers (it’s unclear how much); it’s likely some of it was passed to the recruitment agency that hired Purity, i.e. with Purity charging a lower rate for the worker that it otherwise would.
Purity paid part of its earnings into a Dubai-based pooled investment scheme – the idea was that investment returns would take this to a point where employees’ loans could be repaid (although application of scheme funds for this purpose was discretionary).
In other words:
The Purity scheme
From Umbrella Co. to Worker (Label: Minimum wage)
From Umbrella Co. to Worker (Label: Untaxed "loans")
From Umbrella Co. to Dubai fund (Label: £ to invest)
From Recruitment agency to Umbrella Co. (Label: Fees)
From End User to Recruitment agency (Label: fees)
From Umbrella Co. to HMRC (Label: PAYE and NI only on minimum wage)
The consequences
None of the remuneration tax specialists we spoke to thought it had any prospect of success, for these key reasons:
The employees could choose whether or not to take their remuneration in the form of a “loan”. If an employee is entitled to the full amount as earnings, and merely elects to receive part of it in another form, the amount remains earnings from employment. So this was straightforwardly remuneration. 4 No further analysis is required.
The structure doesn’t make any sense. No rational employee would agree that, instead of being paid by their employer, they take a loan, regardless of what extra-contractual assurances are made about the unlikelihood of the loan being called (and a “discretionary” fund that might or might not help repay the loan would not be very reassuring).5 Hence the “loans” can’t, realistically, have been loans at all. Either the arrangement was a sham or the “loans” were, in substance, remuneration.
The investment scheme introduces an additional tax problem: the “disguised remuneration” rules likely apply both at the point money is placed into the fund, and the point it’s applied for the benefit of the employees. In reality, HMRC had no need to apply the disguised remuneration rules, because the remuneration was taxable on general principles (and there’s a rule that generally prevents a double charge). But in the (highly implausible) scenario where the scheme worked and the investment fund was correctly funded/structured, there would be both up-front tax (on the initial contribution to the investment fund) and tax when funds were distributed to employees.
Since 2013, the UK has had a “general anti-abuse rule” – the GAAR. The GAAR applies only where a scheme can’t reasonably be regarded as a reasonable course of action to take – the “double reasonableness test“. The GAAR has in practice never been applied by a court or tribunal, because almost every tax avoidance scheme of the last 20 years has failed in the courts on the basis of specific tax rules or general principles.6 However, in the very unlikely event that the Purity scheme survived the problems above, we expect that it would be countered by the GAAR.78
The scheme was required to be disclosed to HMRC under “DOTAS” – rules requiring that avoidance schemes are disclosed at an early stage to HMRC, so that they can counter them. Purity simply ignored DOTAS. We can see no proper basis for this.
One respected senior tax KC (not involved in these schemes) described the Purity structure as “incompetent and impossible”. A senior tax lawyer specialising in remuneration tax told us it was “unbelievably bad”.
We are therefore not in the traditional tax avoidance scheme territory of an attempt to find a loophole. The structure simply fails.
In many areas of law, it’s useful to have an opinion from a barrister that you have a decent argument, even if he or she thinks that ultimately a court will probably not agree with it. A 30% chance of winning litigation worth many millions of pounds is often worth taking. However, when designing a tax structure, you can’t proceed on that kind of basis. It is only proper to submit a tax return if the position taken is “more likely than not” correct.9 If, on the other hand, you think that there is a more than 50% chance that your position is wrong, and you file a tax/PAYE return anyway – without disclosing the issue – then in our view you are potentially in the territory of criminal tax fraud (“cheating the revenue“). It follows that the scheme’s lack of technical merit is very serious.
Then there is the added element of deception – the “loans” that were not really loans. Deception as to a factual question is a very common basis for tax fraud prosecutions.
Other elements of the structure suggest criminal offences may have been committed.
Employees were misled or misinformed about the nature of the arrangements (presumably because they would have been alarmed if they’d realised that, whatever assurances they were being given, they’d be in serious financial/legal jeopardy when the loans fell to be repaid). It is a criminal offence to intentionally and dishonestly make a false representation with the intention of making a gain.
The sole shareholder of Purity claimed she didn’t know she was a shareholder. If that’s true, then somebody may have filed a false document with Companies House, a criminal offence. If not true, the shareholder may have committed perjury.
The investment scheme could never have repaid the loans. Purity made £45m of loans in one year but had contributed only £470k to the investment scheme. There was no realistic prospect that investment returns would enable the scheme to eventually repay the loans. The employees were misled.
All of this suggests to us that the Purity structure was dishonest in its design and implementation.
But, according to the Purity High Court judgment, Purity was advised by a KC:
We understand that the people behind Purity received a KC opinion confirming that the scheme worked – despite everything suggesting that it wouldn’t. In our view, that opinion was false.
The KC opinion
We don’t believe any reasonable tax adviser would think this scheme works. Indeed any reasonable tax adviser would know that any remuneration scheme of this nature would fail. As tax barrister Patrick Cannon says, it was clear to advisers from (at the latest) 2010 that anyone engaging in a disguised remuneration scheme would be acting contrary to the intention of Parliament (and that rarely ends well). HMRC said back in 2017 that HMRC would challenge users of these schemes, investigate their affairs and apply the GAAR.
So how could a KC provide an opinion backing the structure?
We haven’t seen the Purity opinion, but the opinions we have seen have all followed this approach:
Make unrealistic assumptions that eliminate the rules/principles that would otherwise undo the scheme. For example, the KC could assume that the loans have real substance and the parties expect them to be repaid (via the investment fund). Any experienced lawyer should know this cannot be the case: no rational employee would replace normal remuneration with a loan they’re required to repay, with vague assurances about future discretionary payments from an investment fund they know nothing about. A moment’s thought reveals that properly funding the investment scheme would require more cash than Purity had.13
Ignore tax principles which would defeat the scheme. Over time, and particularly since the early 2000s, the courts adopted a purposive approach to the interpretation of tax statutes. As a result, almost no14 tax avoidance schemes have prevailed in court in the last 20 years. The avoidance scheme opinions we’ve reviewed deal with this by simply not mentioning the courts’ modern approach to construing tax statutes.
Take extremely technical and narrow approaches to interpreting the relevant tax rules – a task made much easier by ignoring the way in which courts actually approach statutory construction.
Ignore other tax rules that might apply: for example the GAAR or DOTAS.
Ignore the potential fraud of third parties involved in the scheme. The KC would surely know that an employee who fully understood the loan would not enter into the arrangement. The KC should have realised the investment scheme would not be properly funded. The obvious conclusion: the scheme users were being misled.
You can see an example of such an opinion in our investigation of a different umbrella scheme backed by an opinion from Giles Goodfellow KC.15 That scheme was, in a different way, just as outrageous as the scheme here, with unrealistic assumptions, no analysis of caselaw or inconvenient rules, and it also involved putting unrepresented individuals in legal and tax jeopardy.
These opinions are “false” in the sense that, if the scheme comes before a court, it will almost certainly fail. The KC surely knows this, given the history of tax avoidance schemes in the last 20 years.
Most lawyers go out of their way to not issue incorrect opinions. Quite aside from ethics and professional pride, there are obvious adverse consequences: an angry client, and potentially a negligence claim. However a scheme promoter is very unlikely to be angry when their scheme fails – they expected it. The opinion was for a very specific purpose: to provide cover against the possibility of criminal prosecution.
So do these KCs issue false opinions?
This is a psychological rather than legal question, but in our view it’s a mixture of bad incentives (fees for issuing the opinion; no downside when the opinion turns out to be wrong)16 and arrogance (“my view of the law is correct; the courts just keep getting it wrong”).
Chartered accountants, chartered tax advisers and solicitors are prohibited from facilitating abusive tax avoidance schemes, because their regulators require them to adhere to the Professional Conduct in Relation To Taxation (PCRT). Barristers are not. This is an anomaly it is hard to justify. However, it means that the small number of barristers17 issuing these false opinions believe they are untouchable.
How do the promoters respond?
There are very few cases of umbrella companies, or indeed anyone, defending their scheme before a tribunal. The users of the scheme generally rely on the promoter to liaise with HMRC, and their aim is to delay and frustrate HMRC, not to provide substantive responses. What tends to happen is that HMRC issue a “stop notice” and/or a DOTAS notice, and the companies respond with delaying tactics and frivolous arguments.18
The umbrella companies mysteriously have enough money to run these delaying arguments (sometimes including expensive judicial reviews) but, once those arguments fail, usually run out of money, and become insolvent, never defending the scheme itself. In fact we’re unaware of a single case where one of these remuneration schemes has been defended before a tax tribunal.
The point of the delaying tactics is to keep the money rolling in for as long as possible. Purity avoided tax on over £45m of remuneration, retaining a fee of £9m which it paid to its shareholders – but by the time it was put into liquidation, it had almost no cash – owing HMRC £26m:
In Purity, things were a little different. HMRC used a new power under section 85 of Finance Act 2022, which enables HMRC to present a winding up petition against the promoter of a tax avoidance scheme where a scheme doesn’t work and HMRC believe that it’s in the public interest for the promoter to be wound up. Purity is the first time that power has been used.
Purity played the usual game of delaying tactics. It commenced an appeal against HMRC’s assessment but then dropped it. It commenced a judicial review in 2024 to try to halt, or at least pause, HMRC’s section 85 proceeding. Judicial reviews are expensive undertakings; Purity seems to have had no problem funding multiple applications and appearances. However after the judicial review failed, Purity was left to go insolvent, and it ended up not defending the section 85 application. Another company running the same scheme, Alpha Republic, played the same game.
This list currently has 165 entries (dating from 202219); around 50 are being added every year. If every scheme is responsible for a similar tax loss to Purity, that implies (very approximately) about £1bn every year – and these are just the schemes identified by HMRC.
The figure may be higher. We’ve spoken to informed sources within the “remuneration scheme” world who estimate several billion of tax is lost every year.
We’ve spoken to people at HMRC who believe these schemes could be one of the reasons for this:
Note how the large business and medium business tax gaps have fallen significantly over the last twenty years. The small business tax gap has risen, with a dramatic change from 2017/18 – representing billions of pounds of lost tax revenue. One plausible explanation for at least some of that increase is remuneration schemes (which are essentially being misclassified as small businesses). More on this here, with links to the underlying HMRC tax gap data.
Ending whack-a-mole
Currently HMRC is playing “whack-a-mole“. A promoter starts a scheme. Usually within a year, HMRC discovers the scheme and starts to issue a DOTAS number and/or a stop notice. The promoter employs the usual delaying tactics and, when these eventually fail, they wind up the company and move onto the next one. The individuals controlling these schemes are unknown to the public and often unknown to HMRC – they increasingly use stooges as directors to hide their identity.
None of this should be permitted. Aside from the lost tax, it’s harmful to the workers who get caught up in the scheme, and it wastes considerable HMRC and court/tribunal resources.
The Government published a series of proposals in the Autumn Budget aimed at promoters, with the intention of ending “whack-a-mole”. Most significantly, HMRC will be able to issue a “universal stop notice”, making promotion of particular schemes a criminal offence (currently stop notices have to be issued on a per-promoter basis). There will also be a general criminal offence of promoting tax avoidance schemes that have no realistic prospect of success.
However we fear that promoters will attempt to escape these rules by obtaining opinions from compliant KCs.20
The game will only truly end when barristers face professional and/or legal consequences for issuing knowingly or recklessly false opinions:
The Bar Standards Board could make clear that it is a disciplinary matter for a barrister to provide an opinion which facilitates a tax scheme that has no realistic prospect of success. Specifically, where the barrister recklessly or knowingly makes key factual assumptions that he should have realised are probably untrue, or recklessly or knowingly adopts arguments that have no realistic foundation, it breaches a barrister’s core duty to act with honesty and integrity.
In cases like Purity, HMRC could use its information powers to obtain copies of the KC advice, applying the iniquity exception from legal privilege.21 If the advice is improper, HMRC could pass it to the Bar Standards Board.22
In suitably serious cases, HMRC could prefer the barrister for prosecution for tax evasion. Barristers have beenprosecuted for tax evasion before – but, as far as we’re aware, that was always for their own taxes. We’re not aware of any case of a barrister being prosecuted for facilitating tax evasion by a client. The standard view is that an insuperable difficulty is that the KC’s advice is privileged. In cases like Purity, we believe prosecution should be considered. The scheme is either fraud or close to fraud – so there are grounds to believe that the iniquity exception from privilege applies (an argument which HMRC have successfully run in other, very similar, contexts).23
Jolyon Maugham wrote about this problem fourteen years ago. He’s not alone – many barristers, and many tax barristers24, are appalled by what their colleagues are up to. But nothing has changed. If the Bar Standards Board can’t or won’t act, Parliament should.
Thanks to the remuneration tax experts who provided their insights on the schemes, legislation and caselaw, particularly T, B and V. Many thanks to M for alerting us to the case, to K and B for advice on the FSMA aspects, and to P for their privilege expertise. Thanks most of all to our sources in the recruitment world.
Footnotes
By which we mean: there is a clear advantage in terms of circumventing/avoiding/evading tax and other legal obligations, but no clear bona fide reason for these structures. It’s not apparent why the law and public policy should permit these types of vehicles to exist. ↩︎
This figure isn’t in the judgment. We’ve estimated it as £45m of loans representing 80% of the remuneration of 90% of the workers implies £63m of total remuneration. If the workers were paid £50/hour then the number of workers = £63m / (£50/hour x 2,000 hours x 21/24 of a year) = 720 ↩︎
The judgment says the loans were interest-bearing – it’s not clear how this worked. ↩︎
This should probably be viewed as a drafting/structural error by Purity, albeit an extremely bad and obvious one. Perhaps it was required for marketing reasons as a way of reassuring employees who were nervous about the “loans”? ↩︎
That is why the “traditional” loan schemes involved a loan from a trust – the employees could be reassured that the trust had their interests at heart and wouldn’t in practice just demand repayment of the loans. These reassurances were in many cases false – the trust absolutely could demand repayment of the loans (and some have). But no legal reassurance at all can be offered when the employer is the lender. ↩︎
A hypothetical scenario in which we’d get to this point would be a realistic investment scheme structure, a series of artificial structural elements which take it out of the disguised remuneration rules, and a court/tribunal deciding that it can’t take a purposive approach to the rules. None of this is very plausible. ↩︎
It is probably permissible to file on the basis of a lower standard provided full disclosure is given – but none of the schemes we’ve seen involve any disclosure to HMRC. There is an excellent summary of the caselaw in this article by David Harkness, now a tax tribunal judge. ↩︎
HMRC appears to have made this point in passing. See paragraph 3 of the 2024 hearing. And note the stringency of the test – “wholly for the purposes of a business” where the loan is less than £25k (which monthly advances will have been), or “wholly or predominantly” in other cases. ↩︎
Note that, without this, it is possible that the loans would be regarded as remuneration for tax purposes but still as loans for general legal purposes – that’s an unjust result for the workers, but a consequence of courts being more reluctant to apply a “substance over form” approach to contract law than they are to tax law. The loan being unenforceable is a good result for the employees. It also adds an additional argument (not that it’s needed) for HMRC that the “loans” aren’t really loans at all. ↩︎
Note that it’s no defence to say that Purity retained discretion over whether any investment returns would in fact be applied to repay employees’ “loans”. The statutory test is not whether participants have a legally enforceable right to a distribution, but whether the purpose or effect of the arrangements is to enable persons “taking part” to participate in or receive profits or income arising from property. Here, the scheme was presented as a pooled investment intended (at least in principle) to generate returns which could be applied for the benefit of a defined class of UK workers, by meeting liabilities said to be owed by them. That is sufficient to bring the arrangements within the scope of s235, even if the operator retained discretion as to whether and when any payments were made. ↩︎
i.e. because if we assume Purity’s profit was around £12m, then even if Purity used all of it (!) to fund the investment scheme, and even if we ignore the employee’s interest payments, the investment scheme would need a 9% return for 15 years for the £12m to grow to £45m. ↩︎
There are perhaps two exceptions: the SHIPS 2 case, essentially because the legislation in question was such a mess that the Court of Appeal didn’t feel able to apply a purposive construction, and D’Arcy, where two anti-avoidance rules accidentally created a loophole. Both pre-date the GAAR. ↩︎
We are not saying that Mr Goodfellow is the KC who provided the opinion for the Purity structure (we’ve no reason to think he was – we don’t know currently who the Purity KC was). ↩︎
Another factor, particularly for the older KCs, is that their practice failed to adapt with the times. Back in the 1990s, many or even most of the top tax barristers and law firms had highly lucrative practices advising on tax avoidance schemes (although rarely called that; “structure finance” was a common term). A combination of new legislation and new judicial approaches meant that, in the early 2000s, it started to become clear that these schemes were becoming less and less likely to succeed. That pressure only increased over time – then the financial crisis, and the media and political focus on tax avoidance, ended the market almost completely. Most tax barristers (and solicitors) moved away from advising on these schemes (or, in some cases, retired) because the prospect of success were so poor, and well-advised clients wouldn’t go near them. For whatever reason, a small number of barristers did not, even though the legal prospects of the schemes were now extremely poor. These “old hands” have now been joined by a small number of younger barristers (generally their former pupils). ↩︎
Numbering fewer than a dozen, and all men. They are mostly KCs but some junior barristers are involved ↩︎
Before that date, HMRC was only permitted to publish names/schemes for twelve months. ↩︎
For example, the draft universal stop notice legislation has a “reasonable excuse” defence. Promoters will claim that they acted in accordance with a KC’s advice, and that was a reasonable excuse. The draft legislation attempts to prevent this by saying that the defence is not available if legal advice is unreasonable, or not based on a full and accurate description of the facts, but if advice is privileged then HMRC will have great difficulty applying this exception. ↩︎
The iniquity exception applies if documents come into existence as part of, or in furtherance of wrongdoing (including, but not limited to, crime and fraud). In our view, these schemes fall within the scope of the exception even if they do not amount to fraud, because the exception extends to underhand conduct which is contrary to public policy. (see the Al Sadeq case). If HMRC has difficulty establishing that the iniquity exception applies, then a specific statutory exclusion from privilege should be created for advice facilitating tax avoidance schemes which fail the GAAR “double reasonableness” test. ↩︎
The iniquity exception applies if documents come into existence as part of, or in furtherance of wrongdoing (including, but not limited to, crime and fraud). The exception extends to underhand conduct which is contrary to public policy. In our view, these schemes fall within the scope of the exception (see the Al Sadeq case). ↩︎
Tax barristers have told us about instances where they’re approached for an opinion, particularly on DOTAS, and they say the opinion can’t be given. The client then goes elsewhere – and frequently to one of the KCs this article concerns. ↩︎
The flagship policy is being widely reported as a cut in income tax1 for low earners, by increasing thresholds from 2026/27. The 20% basic rate will now start at £16,538 instead of £15,398. The 21% intermediate rate will now start at £29,527 instead of £27,492.
This is a very peculiar tax cut. I have four quick thoughts, and an interactive tax calculator showing the effects:
A very small tax cut
The impact looks like this:
A taxpayer earning £15,398 or more receives a small tax cut – £6.02 at £16,000, rising to £11.40 at £16,538 (i.e. because that’s 1% of the difference between £16,538 and £15,398).
A taxpayer earning £27,492 or more receives an additional tax cut – £5.08 at £28,000, rising to £20.35 at £29,527 (1% of the difference between £29,527 and £27,492).
Everyone earning more than £29,527 gets the full benefit of both cuts, i.e. £31.75.
This may be a contender for the smallest income tax cut in history. The previous record holder was the Australian $4 per week tax cut of 2003, widely mocked as a “milk and sandwich” tax cut. The £212 “marriage allowance” introduced by the Cameron Government runs it a close second. The £31.75 cut beats both handily – it’s 61p per week. The amounts are so small that for some small businesses, the time/cost of recoding people’s taxes will be more than the tax they will save.
It’s not a tax cut
The benefit of the tax cut is undone by “fiscal creep” – the freezing of personal allowances and tax thresholds at a time of relatively high inflation (just over 3%). That pushes the low paid over the personal allowance, and others into higher tax brackets.2
This is a much bigger effect than the “tax cut”. If we just look at the personal allowance, to keep up with 3% inflation, the threshold should have risen from £12,570 to £12,947. It didn’t rise at all – and means that, in real terms, everyone earning £12,947+ is worse off by £72. The “tax cut” means there’s no fiscal creep in 2026/27 for the basic rate and intermediate rate band threshold, but there is for the other band thresholds.3
So in real terms nobody is receiving a tax cut. The real effect of the Scottish Budget is that the income tax increase from fiscal creep is slightly reduced.
Across the whole UK, fiscal creep amounts to a tax increase of £30bn/year. The cost of the Scottish tax cuts is £50m – it’s an irrelevance in fiscal terms.
The benefit goes to higher earners
This is being positioned as a “tax for low earners”, but most of the benefit goes to higher earners. Of the £50m overall cost of the tax cut, about two-thirds will go to the highest earning 50% of taxpayers. That’s because all of the top 50% receive the full £31.75 benefit, but many lower paid taxpayers receive nothing or only £11.40.4 We shouldn’t overstate this, because the amounts involved are so very small. But given the tax cut is symbolic, it’s fair to ask why the symbolism is so odd.
It’s – obviously – all about politics
Given these oddities, why bother to implement a tax cut at all?
The Scottish Government’s Tax Advisory Group (of which I am a member) had no involvement in the decision-making process. This was an entirely political measure.
It’s likely the purpose is to enable the Scottish Government to say that everyone earning the Scottish median income of £31,136 (or less) will pay less tax in Scotland than in the rest of the UK. That had always been their aim, but inflation/wage rises meant it ceased to be true in 2023/24 and probably 2024/25. So the very slight nudge to thresholds is intended to ensure that (at current projected median earnings) the median earner in Scotland pays about £24 less tax than someone on the same earnings elsewhere in the UK (and someone earning less than £29,527 about £40 less). This is, however, very dependent on median earnings. Higher than expected inflation/wage increases will reverse it, as happened in 2023/24.
The real difference is for higher incomes. Someone earning £50k pays £1.5k more tax; someone earning £100k pays £3,300 more. That means, overall, Scotland raises about £1bn of additional tax which (broadly speaking) funds additional social and education expenditure. That’s a perfectly valid political choice and, it seems, a popular one. But I’d prefer it was presented more frankly, without gimmicks like “tax cuts” that aren’t tax cuts at all.
The tax calculator
Our interactive tax calculator starts by showing the comparison between Scotland and the rest of the UK. You can also opt to see the change caused by the Scottish Budget, but it’s almost invisible on the chart.
There’s a guide to how to use it in our Budget analysis here, which also discusses marginal tax rates: what they are, and why the UK marginal rates are so unfortunate.
Code
The code for the calculator is available here. If you want to experiment with different rates, you can download all the files and run “index.html” locally. You can then edit “UK_marginal_tax_datasets.json” and add different scenarios.
Footnotes
Note that this is for income tax on wages; income tax on savings/dividends remains at the UK rates and thresholds; a somewhat irrational quirk of devolution. ↩︎
Scotland has no power to change the personal allowance per se, but it could effectively increase the personal allowance by creating a small 0% rate (with additional changes at the top end to roughly mimic the £100k personal allowance clawback). This would broadly amount to the same thing in economic terms. ↩︎
Note that the IFS presents figures for the value of the tax cut in real terms; ours are in cash terms. ↩︎
A simple back-of-the-envelope calculation: HMRC data shows that, in 2022/23, 9% of Scottish taxpayers paid the starter rate. They save nothing from the tax cut. 38% paid the basic rate – most will save £11.40. Then 35% paid the intermediate rate – most will save £32. 18% paid the higher/top rate – all of them will save £31.75. So the weighted saving of the bottom 47% is c£9; the weighted saving of the top 53% is c£32. So about 78% of the benefit would be going to the top 53%, if earnings were the same as in 2022/23. Wages have of course risen significantly since then, pushing many taxpayers in the bottom 50% into higher bands – that’s bad news for them overall, but means they receive proportionately more of the benefit of the tax cut. Overall we estimate that around 60-65% of the benefit will end up going to the top 50%. ↩︎
Samuel Leeds is a self-proclaimed “property guru”. He makes substantial sums by using hard-sell tactics and conspiracy theories to sell expensive courses on property investment to people who can’t afford it. Mr Leeds makes an array of claims on social media about how to “pay zero tax” and “learn the tax loopholes that the rich use“. We’ve reviewed these claims, and many are simply wrong. One is particularly egregious: the idea that you can repeatedly buy a dilapidated property, refurbish it and sell it, and claim main residence capital gains tax relief each time. Mr Leeds says he’s used this “strategy” himself multiple times. But the strategy doesn’t work – there are rules that specifically prevent it. If Mr Leeds really used the “strategy” then it wasn’t clever tax planning, but a failed attempt at tax avoidance – and he may owe significant tax to HMRC.
Mr Leeds claims tax expertise beyond most accountants. The reality is repeated, basic errors. That raises an obvious question about everything else he sells.
It’s a simple claim: that you can buy a run-down property, renovate it, sell it – and the sale is exempt from capital gains tax. Mr Leeds says he’s done this “multiple times”.
This is not a one-off. Mr Leeds makes the same claim in this video, saying you can “continue to do this again and again, completely tax free”:
And here:
And again here, here (in a video entitled “how to avoid capital gains tax”), here, here, here.
The idea that “the rich” move into uninhabitable houses to save tax is obviously daft. However there’s a bigger problem.
The legal reality
The main residence exemption is in sections 222 and 223 of the Taxation of Chargeable Gains Act 1992. This requires that a property is your “sole or main residence”. That’s an immediate problem for the Leeds scheme because, as the First Tier Tribunal said in the Ives case:
“The cases on the meaning of “residence” make it clear that there is a qualitative aspect to the question whether a person is occupying a property as a residence. This would lead us to conclude that a person who sets out to live in a property only whilst working on and subsequently selling it, and who has no real intention of making the property their settled home, is almost certainly not occupying the property as a residence.“
So the basic answer is that the Leeds scheme simply doesn’t work, because you may be living in the property, but it’s not your “main residence”.
There’s a further problem – a specific exclusion from the exemption in section 224(3) of the Taxation of Chargeable Gains Act 1992:
By his own admission, Mr Leeds’ purpose for acquiring the properties was to realise a gain. So, even if each of the properties was his “main residence” (doubtful), section 224(3) applied and he should have paid capital gains tax.
That’s not the only way this goes wrong – repeated acquiring, renovating and “flipping” of properties may constitute a property development trade2, if the acquisition was for the purpose of renovating and “flipping”.3 If it does, then the profits are taxable to income tax rather than capital gains tax – a higher rate, and no main residence exemption.4
None of this is very obscure or difficult, and in our experience the law is widely understood by property investors.
We can see only one case where Mr Leeds warns people that in fact the main residence exemption is not available if you buy with the intention to sell.5 So, given he knows this, why does he say everywhere else – very clearly – that you can use the exemption in such a case?
Other claims
Mr Leeds makes a variety of other tax claims:
Trusts
For most people, trusts are not good tax planning. Putting property in trust (above the £325k zero rate band) is a lifetime chargeable transfer giving rise to an immediate 20% inheritance tax charge. The trust is then subject to an inheritance tax “anniversary charge” of up to 6% of the trust’s asset value every ten years (again above the £325k zero rate band).6 There are lots of people selling trust schemes which supposedly avoid these taxes – the schemes we’ve reviewed do not work.7
IHT planning
Here’s another claim from Mr Leeds:
This is another strategy that doesn’t work. If you continue to live in your house after gifting it to your kids, then the “reservation of benefit” rules apply, and inheritance tax applies as if you hadn’t given the house away.89
Holding UK property offshore
And here’s Mr Leeds claiming last year that someone living in Monaco pays no UK tax on UK property income:
In this video, Mr Leeds suggests that your company can employ your spouse or your kids (from as young as 13 years old), pay them £12,500 each, and so extract cash from the company tax-free.11
HMRC may also challenge this as a diversion of the owner’s income. The usual approach is to deny a corporation tax deduction where the payments are not wholly and exclusively for the trade, and/or to treat the payments as the owner’s remuneration in substance. In some cases HMRC may also invoke specific anti-avoidance rules, including the settlements rules.
Stamp duty and VAT on “uninhabitable” properties
This video makes two misleading claims about saving tax when buying uninhabitable properties:
First, an incorrect explanation of the stamp duty12 rule for uninhabitable properties:
For example, let’s say you buy a rundown house for £150,000 as a buy/refurbish/refinance or a flip investment property. Normally, as a second property, an investment property, you’d pay 5% [stamp duty] on the first £250,000. That’s £7,500 cash up front in stamp duty tax. But because the property lacks a kitchen, bathroom, or heating, it qualifies as uninhabitable. So you pay zero stamp duty up to the first £150,000 and then just 5% on any excess amount, saving you £7,500. The key is getting a RICS surveyor to confirm that the property is uninhabitable.
This is not correct. The “uninhabitable property exemption” (strictly the question of whether a property is “suitable for use as a dwelling“) will only apply in unusual cases. HMRC guidance at the time was clear:13
A very high proportion of the SDLT repayment claims that HMRC receives in relation to this area are wrong. Customers should be cautious about being misled by repayment agents into making incorrect claims.
Whether a property has deteriorated or been damaged to the extent that it no longer comprises a dwelling is a question of fact andwill only apply to a small minority of buildings.
If the building was used as a dwelling at some point previously, it is fundamentally capable of being so used again (assuming there is no lack of structural or other physical integrity preventing such use). Such a building is likely to be considered “suitable for use as a dwelling”, even if not ready for immediate occupation at the time of the land transaction.14
It follows that a surveyor’s opinion on the current condition does not mean that the exemption applies.15 The fact that (for example) a property temporarily lacks a kitchen or bathroom, or doesn’t have heating, doesn’t mean it’s not a dwelling.
Second, a misleading explanation of VAT:
Let me explain how VAT reclaim on renovations works. If you’re about to renovate a property, this next law could save you thousands in VAT value added tax savings.
If a property has been empty, like many have for two years or more, you qualify for a reduced 5% VAT on renovation costs instead of 20%. For example, say you buy a rundown house that’s been vacant for a few years, you budget £100,000 for the refurb, normal VAT will be 20%, which is a £20,000 tax bill. But the reduced VAT at 5% is just £5,000 meaning you’re saving £15,000. And to qualify for this relief, all you have to do is prove the property was empty with council tax records or utility bills, and then work with a VAT registered contractor to apply the discount.
The 5% rate for renovation of empty properties applies to building materials and works to the fabric of the building. HMRC treat several common refurbishment items as standard‑rated, including the erection/dismantling of scaffolding, professional fees (architects/surveyors/consultants), landscaping, hire of goods, and the installation of goods that are not ‘building materials’ (for example carpets or fitted bedroom furniture). In practice someone undertaking a £100k refurbishment will almost never qualify for the 5% rate on all of it.
Wear your brand
Here’s Mr Leeds saying that you can buy clothing with your branding and claim a tax deduction:
This is poor tax planning. You’re unlikely to get a tax deduction because the clothing isn’t “wholly and exclusively” for the purposes of the business. Worse, clothing is usually a “benefit in kind” and so taxable for employees – i.e. potentially a worse result for an owner-managed business than if you paid yourself a salary and used that to buy the clothes.
The strange thing is that the video above is from Autumn last year. But five years earlier, Samuel Leeds said that he’d tried claiming a deduction for branded clothing and it didn’t work:
“My clothes. I tried it. I tried getting my clothes tax deductible, and putting my name on it and stuff. Didn’t get it past HMRC. So I was, like, forget it.”
The Samuel Leeds course
Samuel Leeds markets a course on how to “protect your wealth and legally avoid property taxes”.
It costs £995. That’s a lot of money for generalised advice that doesn’t relate to your particular circumstances – it’s unlikely there’s anything here that couldn’t be found free on the internet. And if the course reflects Samuel Leeds’ view of “tax loopholes” then we expect that much of it will be wrong.
The money would be better spent on specific advice from a qualified adviser.
What if you’ve used any of these schemes?
If you’ve used any of the “strategies” outlined above then we’d recommend that you speak to a qualified tax adviser as soon as you can. That usually means from someone at a regulated firm (accounting firm or law firm), and/or with a tax qualification such as STEP, or a Chartered Institute of Taxation or Association of Tax Technicians qualification.
Don’t speak to HMRC until you’ve received professional advice. Keep copies of all the material you relied on (videos, course notes, messages) and a timeline of what you did and when – your adviser will need it.
Conspiracy theories
Mr Leeds promotes his tax strategies and courses using false conspiracy theories about tax and HMRC.
This video claims that the World Economic Forum has a “plan to seize your home” and wants to “own everything and take your house in the process”. This is a conspiracy theory based on a misreading of a short 2016 essay by a Danish MP: “Welcome to 2030: I own nothing, have no privacy, and life has never been better“. It was a speculative thought experiment by a single author – not a policy proposal, plan, or WEF programme. The WEF itself has explicitly stated that the article does not reflect its agenda and that (rather obviously) it does not advocate abolishing private property.
Another video is entitled “HMRC WILL come for YOU in 2026”, and claims that the “new”16 procedure for “direct recovery of debts” means that, if HMRC think you owe them money, they can simply take the money from your bank account. That is not correct: the procedure applies only to debts that are already due and legally established – typically after HMRC has undertaken an enquiry, closed the enquiry concluding that the taxpayer owes tax, and the taxpayer has either not appealed, or any appeal has been concluded. It doesn’t bypass enquiries or disputes; it comes after them. There’s an excellent overview in this House of Commons Library briefing. The video concludes by promoting Mr Leeds’ other video which he says will help you learn ways to potentially bring your tax bill down to zero.
We don’t know why Mr Leeds promotes conspiracy theories that just a few minutes’ research reveals have no factual basis.
Mr Leeds initially tried to defend his claims. As John Shallcross, a stamp duty land tax specialist, pointed out, Mr Leeds was citing cases he didn’t understand.
In response, Mr Leeds accused tax advisers of “gatekeeping”:
We asked Mr Leeds for comment before publishing this story and asked, specifically, if he really had – as he claims – “flipped” properties multiple times and claimed the CGT main residence exemption. He refused to comment, instead giving us a generic denial:
The post you have shared describes a high level example of a principal private residence strategy. It is not a statement that repeated property trading would be exempt from tax regardless of facts or intention.
I have not unlawfully failed to pay capital gains tax. Any suggestion otherwise is incorrect.
I do not provide personalised tax advice and I do not advise people to engage in unlawful behaviour. As you know principal private residence relief depends on individual circumstances and intention which cannot be determined from a short social media post.
If you intend to allege unlawful conduct by me personally you will need to provide evidence to support that claim. Otherwise I expect that allegation to be removed from any publication.
I will respond publicly once your article is published.
The problem with Mr Leeds’ “high level example of a principal private residence strategy” is that the strategy simply does not work. If you intend to acquire, refurbish and sell properties, then case law and legislation mean that the main residence exemption will not apply. It’s not about the detail and intention – the basic concept is a failure.
If Mr Leeds’ claim is true, and he really did acquire, refurbish and sell multiple properties, then in our view he should have paid capital gains tax or income tax. If he didn’t, then that suggests tax was underpaid – it’s “failed tax avoidance“. Of course it’s also possible that Mr Leeds exaggerated, and he either hasn’t used this approach at all, or he has exaggerated (for example, because it wasn’t a deliberate strategy at the time, and he didn’t intend to sell the property). He’s certainly exaggerating when he claims “the rich” use this strategy – it goes without saying that “the rich” do not in fact repeatedly move into unliveable houses to save tax.
Mr Leeds repeatedly says he’s not qualified to give tax advice and viewers of his videos should speak to an accountant. That’s no excuse for proposing “strategies” that don’t work. It’s also undercut when he says things like this:
This level of confidence is dangerous – particularly when his courses seem targeted at people on low incomes who may not be able to afford an accountant.
Our view is simple: it’s deeply irresponsible to market tax “loopholes” that don’t work. Mr Leeds claims to know more about tax than most accountants. Yet the examples above contain repeated, basic errors. If this is his “tax expertise”, readers can draw their own conclusions about the rest of his courses.
Many thanks to K and P for help with the tax analysis, to Rowan Morrow-McDade for his original LinkedIn post, and to John Shallcross for his invaluable assistance with the SDLT aspects of this report.
There were similar comments in the Mark Campbell case:
“Having considered all of the evidence, cumulatively, I find that the Appellant did not intend that any of the properties would be his main residence. This is because the evidence before me does not support a finding that there was any degree of permanence, continuity or expectation of continuity in relation to any of the properties. In reaching these findings, I have considered the nature, quality, length and circumstances of any occupation relied on.“ ↩︎
In Ives, it was not – there were successive purchases, renovations and sales, but the Tribunal accepted evidence that each purchase was intended to be a permanent residence, but for various reasons Mr Ives later had to move house. ↩︎
The usual HMRC practice is to run trading and section 224(3) arguments in the alternative. ↩︎
And note that the reference to “income tax” here is also wrong – possibly Mr Leeds is conflating the trading rules with section 224(3). ↩︎
Subject to exemptions like business property relief, which in principle applies to shares in a trading company. However such exemptions also apply if the assets/shares are held directly; the trust is not creating the exemption. ↩︎
One particular variant that’s sometimes marketed uses the employee benefit trust rules, as EBTs in principle aren’t subject to inheritance tax. However EBTs are intended for employee remuneration; using them primarily to benefit participators/owners attracts intense HMRC scrutiny and specific anti-avoidance rules. We are not suggesting Mr Leeds uses an EBT. ↩︎
In principle you can gift your house to your kids and then continue living in it, with your kids charging you a market rent; that’s often an undesirable outcome, particularly as the rent will be taxable for your children. ↩︎
However you did give the house away as far as capital gains tax is concerned, meaning that this “strategy” doesn’t save inheritance tax, but can result in an increased capital gains tax bill for your children. ↩︎
And if you use a letting agent they’re required to withhold tax when paying you, unless you obtain approval from HMRC to be paid without withholding and then file a self assessment. ↩︎
i.e. because he’s claiming the salaries are tax-deductible for the company, but below the personal allowance and so not taxable for the kids. ↩︎
The tax in question is “stamp duty land tax” (SDLT). It’s almost always called “stamp duty” in popular discourse, but “stamp duty” is actually a completely different tax. With apologies to tax advisers, we’re going to use the term “stamp duty” in this article to avoid confusing laypeople. ↩︎
The video was posted in March 2025. The source to the YouTube page includes the metadata: “itemprop=”datePublished” content=”2025-03-09T10:00:25-07:00″. ↩︎
This reflects case law. Five months earlier, the Mudan case had confirmed that the scope of the uninhabitable exemption is very limited (and this was then upheld by the Court of Appeal in June 2025). ↩︎
Mudan is clear that you can’t form a judgment based on a “snapshot”. ↩︎
It’s not new. Direct recovery of debts came into force in 2015, was paused as a result of Covid, and resumed in 2025. ↩︎
We’ve modelled the impact of the English “mansion tax“1 by analysing land registry data on every property transaction since 1995. This lets us estimate how much each postcode and Parliamentary constituency will pay. It’s an approximate and lower-bound estimate – see methodology details below. As property taxes are devolved, there’s currently no mansion tax in Wales and Scotland – although I rather expect there will be soon.
This interactive map shows the results of our model, marking every postcode that contains “mansion tax” properties. It also shows English and Welsh data2 on the current council tax bands, median house prices, and the changes in house prices since 1995 (which demonstrate quite how out of date council tax is):3
You can view the map fullscreen here. It’s important to stress that this is only showing postcodes – the markers on the map are at the centre4 of the postcode and do not represent individual properties.
This chart shows our estimate of the revenue from the mansion tax for each constituency. You’ll be unsurprised to see that most affected properties are in London (you can move the mouse over individual constituencies to see full details).
My view is that the tax is good policy. There will be inefficiencies and unfairnesses, as with all taxes, but the basic concept is right: ending the anomaly that someone in a £10m home pays the same council tax as someone in a £1m home – and only twice the council tax of someone in a £400k home. I wrote more about my views here.
This chart shows how the “mansion tax” makes council tax somewhat more progressive:
It would be technically straightforward for our analysis and map to show the estimated value and mansion tax for individual properties, but we were uncomfortable with the privacy implications (although there are many property price websites that let you see “price paid” data for specific properties). We therefore limit the map to postcodes (which has the side benefit of making the app load and respond much faster).
Our very simple approach has obvious limitations:
The open Land Registry data doesn’t include title numbers or other identifiers for properties. So we have to “de-duplicate” repeated transactions in the same property, so we only count the most recent. This is error-prone and we err on the side of conservatism – we’ll therefore be missing some properties.
The open Land Registry data also doesn’t differentiate between residential and commercial. We use the “Property Type” field which says whether a property is detached, semi-detached, terraced, flat/maisonette or “other”. In principle, “other” should be commercial property and the other types should be residential – but there will be numerous cases where this isn’t so. For example a farmhouse sold with the farm may be classified as “detached” and so caught in our data as if the full price related to the house, when realistically it won’t.
Inflation is higher in some areas within a constituency than others
We can’t take account of improvements etc to properties, conversions (e.g. where a property is split into flats), and any other changes after a sale.
Our approach completely ignores properties that haven’t been sold since 1995.
In some cases (particularly high value property) the price is hidden, or too low.
Portfolio transactions are another problem – e.g. where multiple low value properties are acquired for a large £2m+ price, but no separate price is registered for each property. In that case the land registry sees each property as a £2m+ sale, and we end up with multiple false identification of “mansions”. We try to fix this by identifying when there are multiple purchases on the same postcode on the same date for the same price – but this won’t catch all such cases (e.g. where a portfolio transaction spans multiple postcodes). There isn’t an easy way to fix this.
Taken together, our approach is likely generating a lower-bound estimate of the actual static revenue from the tax. The total estimated revenue is £510m.6
This is much less than the OBR’s static revenue estimate of £600m – that will be because they used more sophisticated approaches, for example more granular house price inflation corrections, better detection of residential property, inclusion of properties that aren’t in the transaction data. The OBR then adjusts the static estimate to reflect behavioural effects (clustering below thresholds) and losses to other taxes – this brings their total estimated revenue to £400m.
So our figures, and our map, are missing properties and undervaluing properties, and that together amounts to an error of about 20%. We make no attempt to adjust for behavioural effects. So none of the figures we present will be individually accurate, but the overall picture should be an accurate reflection of the constituencies and postcodes from where the “mansion tax” revenues will come.
Strictly the “high value council tax surcharge” or HVCTS. ↩︎
Unfortunately it’s limited to England and Wales – the Scottish data is separate. ↩︎
Much worse in England than Wales, because England is still on the original 1991 valuations, but Wales revalued council tax in 2003. There was a huge amount of house price inflation in the 1990s. ↩︎
Strictly it’s the address-weighted centre, not the geometric centre. ↩︎
i.e. labelled as detached, semi-detached, terraced or flat/maisonette. Almost all of those are residential. Some of the other category (“Other”) will also be residential, but we’ve no way to screen those using only land registry data – typically one would use a commercial database to cross-check. Government/local authorities can of course use council tax/business rate records. ↩︎
The original version of this article said £400m. We’ve since improved the algorithm; it’s better at removing repeated transactions in the same property (i.e. because we only want to take the most recent). It’s also now using change in median detached house prices per constituency, rather than change in all median house prices. Detached houses are likely a better proxy for change in value of very expensive homes. ↩︎
Here’s our summary of the Budget and a quick take on what the various measures are likely to mean.
(The first draft of this article appeared unusually early, thanks to the OBR accidentally publishing their assessment of the Budget about half an hour before the Chancellor started her speech.)
Key elements
It’s all about fiscal creep:
The overall impact is one of the largest medium-term tax rises in recent years – £30 billion a year by 2030/31:
Three measures do most of the work.
First, that “fiscal creep”. Since 2018, successive Chancellors have let tax thresholds become eroded by inflation. The IFS said in 2023 that this was the largest single tax-raising measure since 1979, but after two years’ of further creeping, the OBR’s latest estimate is that fiscal creep will raise £32bn in 2026/27 and £39bn in 2029/30. This is likely the largest overall tax increase from a single policy in the post-war period.1
This means median earners have been paying a bit more tax (but less than before the personal allowance was cut in 2011), and many more people have become higher rate taxpayers (paying quite a bit more tax):
Second, salary sacrifice is being capped to £2,000. We may see this exacerbate the “bumps” in the income distribution, where people can currently use salary sacrifice to stay under thresholds that result in high marginal rates:
Third, a slight surprise: an increase in income tax on investment income – property, savings and dividends. The political attraction is obvious, and the Chancellor sensibly didn’t put up the top (additional) rate of dividend tax. That’s probably because UK dividend tax is already one of highest in the world. Look at the top of the arrow tails on this chart:
There’s a nice infographic in the Budget documents showing how the different rates of basic rate income tax now look:
Basic rate dividend tax is therefore (taking corporation tax into account) no at the “right” rate – and additional rate dividend tax already was.
All these measures are back-loaded:
Fourth, a significant HMRC compliance package, which the OBR seems to accept will materially reduce the tax gap:
My immediate reaction is that it’s fair that expensive houses pay more council tax. The current system is inequitable – a tax that looks like this can’t be defended:
It would have been much better to revalue council tax and add more bands. Given that is seen as politically too hard, the Government instead created a new tax working off a fresh valuation basis:
The oddity is the limited number of bands. That probably makes valuation easier, but means there is a sharp discontinuity at the boundaries (and so lots of appeals around the £2m point) and that £100m properties don’t pay more than £5m properties. So the curve created by the new tax is an improvement, but still looks a bit odd:
Economists usually assume that an annual property tax is “capitalised” into prices – buyers factor in the future stream of payments. On that basis, a £7,500 annual charge cuts the value of a £5m property by perhaps £200k to £300k, i.e. 4-6%. However that’s if people are rational calculating machines – obviously they are not. Stamp duty on a £2m property is £150k; on a £5m property it’s £500k. These ridiculous numbers are why stamp duty should be abolished and replaced with an annual property tax. But their sheer size means buyers may not regard the prospect of £2,500 to £7,500 annual taxes with enormous trepidation.
The tax will apply from April 2028. It will be collected by local authorities (together with council tax), with the revenue going to central Government, and central Government compensating local authorities for the admin cost.
The tax doesn’t raise much – £400m. That was the correct decision. A “proper” percentage mansion tax would have had a much more serious impact on the property market. It would also have been unfair to people who happen to own property today, as they would have taken the hit (with the economic effect rather like one-off tax on property wealth). We absolutely should have a proper percentage-based property tax, but that has to be part of wholesale reform, meaning abolishing stamp duty. Having both would be inequitable, and do damage to an already very troubled property market.
Sixth, what is I think a sensible introduction of a mileage tax for electric cars:
There’s a consultation document – the tax will be a new kind of tax for the UK, and that always takes time to design and build. Perhaps sugaring the pill, a consultation on allowing EV charging to be installed across pavements (safely) without planning permission.
Seventh, a reduction in capital gains tax relief for disposals to employee ownership trusts. This was a measure intended to encourage employee ownership. It has been abused in some quarters – and costs much more than originally anticipated.
Eighth, a reduction in writing-down allowances, which allow businesses to claim tax relief when they buy capital items. There’s “full expensing” (immediate complete tax deduction) for plant and machinery, but some items don’t qualify, and must be written off over time (perhaps the most important example is second-hand/used plant and machinery). This change slows down the rate. It will therefore (at the margin) reduce investment in such items.
Closing the loophole that meant that some taxi firms (think: Uber) paid a lot less VAT than they should. This will be portrayed as a “taxi tax” but it’s really just fairness and common-sense – all taxies should have the same VAT rules.
As expected, closing “low value consignment relief”, which exempts imports of £135 or less from customs duties. The intention was always to avoid disproportionate duty and administration charges. The problem is that the relief has essentially been weaponised by the likes of Shein, making UK retailers uncompetitive.
The expected expansion of the higher air passenger duty for private jets, to include large private jets as well as smaller ones.
The Energy Profits Levy (or “windfall tax”) to remain in place until at least March 2030. I expect it will in reality become a permanent feature of the tax system.
A consultation on letting elected mayors introduce tourist taxes. The question is how much they will adversely impact the already-under-pressure hospitality sector. Will be writing more about that soon. The (obvious) lesson of the council tax second home surcharge is that local authorities are so strapped for cash that they will maximise any opportunity they have to make additional revenue, regardless of the merits of the tax.
Changes to the sugar levy, intended to reduce the amount of sugar in drinks – it’s not immediately clear if this will raise additional revenue.
The overall result: by the end of the decade, the UK tax take hits 38% of GDP – the OBR says that is an “all time high”.
Tax cuts
There were a few:
A temporary three year holiday from SDRT/stamp duty on shares for new listed companie. No details yet. It’s good to see focus on this – stamp duty is a damaging tax, and higher than the similar taxes imposed by comparable countries. But I’m sceptical it will be effective. Investors and companies look further out than a few years.
As announced in last year’s Budget, a reduction in business rates for retail, hospitality and leisure businesss, paid for by an increase in business rates for businesses with larger properties (including, but not limited to, the warehouses used by the likes of Amazon).
The Budgets we were never going to see
Quite a lot of complaints are from people expecting Budgets we were never realistically going to see. Three types in particular:
A Budget that cuts spending.
The Spending Review was in June and it seems unlikely any of those decisions will be re-opened. The attempt to find £5bn of welfare savings was a failure, with Labour MPs and much of the public opposed. Whilst many politicians are in favour of generic spending cuts and “efficiency savings”, it’s much rarer to find anyone active in politics (as opposed to think tanks) committed to a specific programme to constrain or even shrink the size of the state.
A Budget that raises income tax
The kind of Budget I and other tax wonks and economists would prefer: where any immediate “black hole” and need for fiscal headroom was resolved with transparent increase in income tax. Every economist I’ve spoken to, Left or Right, believes this would be the least damaging tax increase.
Most of the attention during and after the Budget will be on the big tax-raising measures. But there are an unusual number of important other items, which appear technical, but will impact everyone from billionaire non-doms to the poorest people in the country. None of these items are likely to be mentioned in the Budget speech, but will be buried somewhere in the mountains of paper that accompanies it.
This could be the Budget measure with the greatest long-term impact.
Jeremy Hunt made the decision to move from domicile to a modern residence-based regime (something we and many others had suggested). Labour took that, and made the additional and politically irresistible promise to close the “trust loophole“.
But there’s a problem. The original Hunt changes ignored a key point: that inheritance tax shapes decision-making by non-doms (and indeed many others) far more than taxes on income and capital gains. Hunt’s reforms had inheritance tax applying in full, at the normal 40% rate, once a non-dom had been resident in the UK for ten years. For many non-doms, paying a bit more UK tax on their dividends and capital gains is not a big deal. But the prospect they could fall under a bus, and then their children would lose 40% of their worldwide assets in UK tax, is a very big deal indeed.
That wasn’t a terribly big point back when Hunt made his proposal, because the – very deliberate – “loophole” meant that the seriously wealthy would keep their non-UK assets in trusts and so avoid inheritance tax.
By abolishing the loophole, Labour made the “bus” problem something that couldn’t be avoided. The OBR estimated that 25% of the wealthier non-doms – those with trusts – would leave the UK. This is why.
Fortunately it’s not too late. Despite some media reports, informed observers generally believe no more than 5-10% of non-doms have left so far.
Points to watch: Will the Budget revisit any of the detail of the non-dom reforms? In particular, will there be a new, gentler, application of inheritance tax, for example gradually applying in stages from year ten to year twenty, rather than applying immediately in year ten?
That sharp uptick in 2019/20 may have initially been caused by the pandemic, but we don’t see that effect for other types of taxpayer, and it’s now clear that the trend didn’t slow down after the pandemic.2 Part of the changes appears to be due to a change in methodology, but most is not.3
There’s a sharp contrast with the large and mid-sized business corporation tax gap, which HMRC have been remarkably successful at closing.
The trend isn’t confined to corporation tax – the overall small business tax gap has also ballooned:4
These effects mean the small business tax gap is now at least £10bn/year higher than it should be.5 The surprising thing is that nobody seems to know why this is – not the team who work on the tax gap calculations, and not HMRC or HMT policy experts. There are several theories – in our view the most plausible is that the trend is driven by avoidance, evasion and non-payment which is technically classified as “small business”, but is really just individuals using companies to avoid/evade tax.
Points to watch: will there be recognition that this is an issue, and an announcement that Government will task HMRC with identifying whether the £10bn represents a real loss and, if so, what should be done to collect it?
3. Promoters of tax avoidance
Many of our investigations have concerned what are often called “tax avoidance schemes”, but which are in reality often little more than scams. The schemes usually have no real technical basis, the promoters usually have no tax expertise, and either HMRC loses out or the clients/victims are frequently left with large tax liabilities (or, quite often, both).
HMRC’s official “tax gap” figures show tax avoidance costing HMRC £700m in lost revenue. I and many other observers (within and outside HMRC) believe this understates the problem, because much “avoidance” isn’t properly avoidance at all, and ends up classified by HMRC as evasion or non-payment. Some of the “missing” £10bn of small business tax is likely caused by these schemes.
The Government published a series of detailed proposals in a consultation back in July – “closing in on promoters of marketed tax avoidance”, creating a range of new civil and criminal powers for HMRC. Most importantly, HMRC will be able to charge large penalties to promoters who fail to disclose tax avoidance schemes to HMRC, and Treasury Ministers will be able to make regulations which, once approved by Parliament, will create a “Universal Stop Notice” making promoting a specified scheme a criminal offence.
The package has been highly controversial in the tax advisory world, with many advisers expressing concerns that innocent (which is to say, non-fraudulent) advisers could end up liable. I am sympathetic to some of these concerns, but others I think are overdone. I hope we’ll see finalised proposals which strike the right balance.
Points to watch: will the key “Universal Stop Notice” and penalty measures be included? Will there be new protections for bona fide advisers?
4. Umbrella companies
Millions of people in the UK work are employed by employment agencies for temporary work. That includes NHS nurses, IT contractors, and often low-paid staff such as warehouse workers. But modern practice is that the biggestemployment agencies don’t actually employ anyone. They act as middle-men between end-users (like the NHS or Tesco) and “umbrella companies”, which actually hire the workers. When an end-user asks the employment agency to provide a worker, the employment agency then goes out to umbrella companies and asks them to bid to supply the worker (in a process that is, inevitably, now entirely automated).
This creates a dangerous incentive. In a country with a minimum wage, umbrella companies should have little ability to compete on price (other than bidding down their own profits). But if they can find a way to reduce the PAYE income tax, national insurance and employer national insurance on their workers’ remuneration, they can bid less, and win the contract.
We have therefore seen a huge number of schemes run by umbrella companies to not pay the tax that is usually due. Our team hasn’t seen a single such scheme which has any legal merit. Some have involved simple fraud – just stealing the PAYE instead of giving it to HMRC. More usually the schemes are dressed up as tax avoidance schemes, with the worker supposedly paid in some bizarre manner (such as via an option over an annuity) that avoids tax. In our view these “avoidance” schemes are in reality also fraud, because the legal positions taken are unsupportable. And in almost all cases when HMRC challenges an umbrella company, it’s abandoned by the shadowy figures running the scheme, goes into administration and the tax is never paid.
The scale of the schemes can be seen by looking at HMRC’s list of named avoidance schemes – almost all are umbrella/remuneration schemes. We’ve spoken to informed sources within the agency/remuneration world who believe that several billion pounds of tax is being lost every year.
Draft rules were published in July which make employment agencies jointly liable for tax defaults by umbrella companies. The idea is a sound one: create an incentive for agencies to police the umbrella companies they work with. The problem is that the proposals create another incentive for bad actors: instead of just controlling umbrella companies, acquire/create recruitment agencies. Then, when HMRC attacks schemes, the recruitment agency will be abandoned, leaving HMRC with no way to collect the tax.
The answer is a draconian one: put responsibility on the end-user – the company actually hiring the worker. Tesco or the NHS in our example above. I’d then expect end-users to put very robust measures in place to ensure the tax is paid (for example paying the tax amount into an escrow account so the agency/umbrella can’t touch it).
Points to watch: Will the measures go ahead? And if they do, will liability be limited to agencies and not the end-users? If the measures are enacted without end-user liability then I expect in practice they will have only a limited effect.
5. HMRC penalties: the impact on the poor
Over the past five years, HMRC have issued around 600,000 late-filing penalties to people whose incomes are too low to owe any income tax at all.6 Far more penalties were issued to people too poor to pay tax than to those in the top income deciles:
This is not a niche edge-case: it is baked into the design of the current regime. Since a 2011 reform, late filing penalties are no longer capped by the tax actually due – so a person who ultimately turns out to owe nothing still keeps the penalties.7 Many low-income taxpayers are brought into self assessment by HMRC error, historic earnings, or very small amounts of self-employment income – over £1,000 a year is enough to trigger the filing requirement8
Things should, in principle, improve – the current penalty rules are being replaced with a new “points-based” penalty regime under which nobody is fined for a first missed deadline and total late-filing penalties are capped at £200.9 But the penalty reforms are part of the Making Tax Digital project, requiring businesses and the self-employed to keep digital records and submit tax information to HMRC electronically. That means the changes will only apply to those with incomes over £50,000 from April 2026, over £30,000 from April 2027, and over £20,000 from April 2028 – and there is currently no timetable at all for anyone below that.10 The Low Incomes Tax Reform Group has described the result as a “two-tier system” in which those on the lowest incomes are left with the old, harsher rules.
This means that, for the foreseeable future, a millionaire landlord filing his tax return late won’t pay a penalty; but his low-income tenant will continue to pay up to £1,600. That’s indefensible, and something no Labour Chancellor should stand for.
The 2000s and early 2010s saw widespread marketing of tax avoidance schemes which disguised pay/remuneration as “loans”. The idea was that, instead of being paid in the usual way (and paying tax) you received loans from an offshore trust (and paid no tax). I put the word “loans” in quotes because they weren’t really loans at all – in most cases there was never any intention to repay them.
HMRC failed to effectively challenge the schemes, and by 2019 there were over 50,000 people using them, and lost tax running to billions each year. There was no way to launch 50,000 separate enquiries, and so in 2016 the Government enacted the “loan charge” – a one-off charge on scheme users which retrospectively undid the benefit of the schemes. We discussed more of the background here.
This has caused considerable hardship. The promoters selling the schemes cared only about their fees, and never told their clients about the risks they were running. So the taxpayers generally spent the tax they were saving. Worse, a high percentage of the tax saving went in fees to the promoters – so recovering the full tax amount now means that taxpayers are being asked to repay amounts that never went into their pocket.
The loan charge has become mired in controversy, with lobbyists often denying that the schemes were avoidance, and seeking for affected taxpayers to escape without ever repaying the tax they avoided. That’s not justifiable.
The outcome of the review will be published with the Budget papers.
Points to watch: a sensible outcome would be to distinguish between the actual cash tax savings made by the scheme users, and the large fees they paid to promoters. The loan charge should only recover the former. Any excess already paid by taxpayers should be refunded. It would also be good to see new measures against promoters, for example giving the scheme users a right to recover their losses.
The source is the HMRC tax gap tables – see tables 5.2, 5.4 and 5.5. ↩︎
The only other taxes where the tax gap has gone up over this period are inheritance tax (which likely results from so many more estates becoming subject to the tax) and landfill tax (we don’t know why that is; it’s an area where our team has no knowledge or expertise) ↩︎
There have been a series of upward statistical revisions to data for recent years. These took the 2022/23 small business corporation tax gap from 32% to 40% (with the 2021/22, 2022/23 and 2023/24 figures being essentially identical). However HMRC sources have confirmed to us that these revisions don’t call earlier figures into question, and so the apparent trend in the data is real, and not just a statistical artefact. ↩︎
This is from table 1.4 of the HMRC tax gap tables. HMRC have generally done an excellent job shrinking the tax gap, with declines across the board. But after 2017/18 something changed. ↩︎
The small business tax gap increased from 2.4% of all UK tax revenues in 2005/6 to 3.2% in 2023/24. The rest of the tax gap fell precipitously over that period – large businesses from 1.7% to 0.7%; mid-sized businesses from 1.0% to 0.5%. ↩︎
See HMRC’s FOI response. An interactive breakdown of the data, and the code used to analyse it, is available here. The underlying calculations are on our GitHub. ↩︎
The modern regime is contained in Schedule 55 to the Finance Act 2009, brought fully into effect for self assessment from 2011/12. Under the previous system, broadly, a late filing penalty could be capped by the tax shown as due on the return (for example under s93 Taxes Management Act 1970), so someone with no liability would not normally end up with substantial penalties once they filed. The Low Incomes Tax Reform Group (LITRG) warned at consultation stage that removing the linkage to tax due would risk “wholly disproportionate penalties” for those with low or no incomes: see their response to HMRC’s 2008 penalties consultation, especially para 4.4.1, reproduced at page 5 of LITRG’s later paper, “Self assessment – a position paper”. ↩︎
See the gov.uk guidance on who must file a tax return. In practice, people can also be kept in self assessment long after their circumstances change unless they (or an adviser) tell HMRC they should be removed: see LITRG guidance and HMRC pages on leaving self assessment. Once HMRC’s computer has issued the notice to file, the penalties roll out automatically if nothing is sent back. ↩︎
The new late submission regime is described in HMRC’s guidance note “Penalties for late submission”. In outline, taxpayers accrue “points” for missed filing obligations; once a threshold is reached, a £200 penalty is charged, but there is no further escalation into the thousands. Points expire after a sustained period of compliance. The rules are legislated mainly through amendments to Schedule 55 FA 2009, alongside the wider Making Tax Digital (MTD) programme. ↩︎
See the government’s technical note on the phased implementation of MTD for income tax, and the announcement of revised timings. ↩︎
Council tax is unpopular, not least to a perception that it’s relentlessly going up. But is that true? If we take inflation out of the numbers, and express everything in today’s money, has council tax actually gone up?
Did council tax bills go up?
Here’s the average Band D council tax for England, Wales and Scotland:
English council tax has doubled. Welsh council tax has gone up more than three times. Scottish council tax is largely unchanged.
We should, however, be careful when using the “average Band D” figure. That’s the official statistic, because Band D is the “benchmark” from which the other bands are calculated – but that doesn’t mean Band D reflects the average council tax. The mix of bands varies by local authority (thanks to the hopelessly out of date 1991 valuation basis). The raw “Band D” figure also ignores council tax support (a locally-managed discount for people on low incomes).
So if you are a household that pays council tax, without support, then the chart is probably a good guide to what you’ve actually experienced.
If we want a more general view, we can use the ONS figures for council tax receipts, and divide that by the ONS data for number of households. This gives us a measure of average council tax per household, across the UK:
We see a similar picture, with average council tax doubling.
Why did council tax increase?
Two reasons.
First, because central government funding declined. This chart from the IFS shows total council funding per capita in real terms (the blue line):
Second, because demographic change meant that the demand for social care greatly increased over this period. Councils are required by statute to provide this – so other services were cut:1
So the ultimate answer is that local taxation has increased because councils have been required to take on the burgeoning cost of social care, and at the same time central Government funding has reduced. That’s in the wider context of overall taxation increasing, but the income tax and national insurance burden on the average worker having fallen. Probably fair to say that council tax rising is a consequence of tax not rising (for most people).
ITV News has just broadcast an investigation: gambling company Sky Bet has migrated its business to Malta to avoid around £55m of tax each year. We provided technical support for the investigation, and this report goes into further detail of what precisely Sky Bet has done.
Sky Bet provides a vague explanation of why they moved to Malta (“a number of strategic and commercial reasons”), but this is untrue: they moved to Malta to avoid UK tax. This report sets out the details of what Sky Bet is doing, how much tax it will save, and whether (and how) HMRC should be trying to stop it. And we propose a way to reform gambling taxation so that businesses like Sky Bet no longer have an incentive to move offshore, and those that have moved offshore could have an incentive to return.
Sky Bet
Sky Bet is a gaming company. It was part of Sky plc (the media group) but since 2018 has been owned by Flutter Entertainment, an Irish company that’s probably the world’s largest internet gambling business.1 The rights to the Sky Bet sporting business used to be held by a UK company, Hestview Limited.2
Sky Bet paid general betting duty on its “net stake receipts” (broadly speaking, receipts from gamblers minus payouts). The rate is 15% (fixed odds/totalisator) and 10% for spread bets. Let’s assume (for the sake of this example) the average for Sky Bet is 13%. So on Sky Bet’s £580m3 of net stake receipts it paid £75m.
After other expenses, Sky Bet’s profit was £156m, on which it paid corporation tax at 25% – £39m
Hestview also had a £132m marketing budget – this will include advertising and sponsorship (including its £15m/year sponsorship of the English Football League). The advertisers and sponsors would charge Sky Bet UK VAT at 20% – costing Sky Bet £22m in VAT.4
So Sky Bet’s total tax bill is about £136m (ignoring employee tax and second/third order effects).
Sky Bet’s owner, Flutter, at some point decided it wanted to reduce its tax bill – and this is why Hestview’s 2024 accounts say they decided to move to Malta:
But it looks like there was a last-minute change of mind.5 Instead of setting up a Maltese company, Sky Bet set up a UK company, SBG Sports Limited6, with a Maltese branch (this is clear from documents filed with the Maltese company registry).7
It’s not just a brass plate on an office building, but an actual headquarters, with its senior staff all physically now based in Malta.89
SBG Sports Limited would need a licence from the Gambling Commission. It obtained one in October. It’s unclear if the Gambling Commission knew SBG Sports Limited would actually have most of its operations in Malta.
The c£75m of general betting duty still applies – since 2014, betting duty has applied on all betting by UK customers, regardless of where the supplier is.
SBG Sports Limited is subject to UK corporation tax on its profits, but can elect to be exempt from tax on the profits of its Maltese branch. Those Maltese profits would then be subject to Maltese corporate income tax, not UK tax. Malta has a 35% corporate tax rate – so it looks like they’d pay more than in the UK. The reality is very different.10 For international companies the rate isn’t really 35% at all – if the profit is paid as a dividend to a holding company shareholder, it receives a refund of 30%.11 The actual rate is 5%. That means instead of paying £39m of corporation tax, Sky Bet would be paying £8m.12 The “flexibility” of Maltese tax rules mean in practice they could pay much less.13
UK advertisers and sponsored businesses no longer add UK VAT to their invoices to SBG Sports Ltd in Malta. Instead, SBG Sports will “reverse charge” Maltese VAT (because VAT in this case applies in the location of the purchaser, Sky Bet). SBG won’t be able to recover that VAT. The rate is 18% – so (assuming the marketing budget is still £132m), VAT costs Sky Bet £24m.
On the face of it, the total tax bill is now £107m. The relocation to Malta has saved at least £29m of tax.
That may, however, be just the start. Sources in the gaming industry tell us some people are going further and avoiding the VAT bill as well – and it’s being promoted by Maltese advisers.
Our hypothesis is that Sky Bet is doing something like this:
Instead of SBG Sports Limited buying the advertising/sponsorship, it set up a new company (“ServiceCo”), perhaps in Belgium, Luxembourg or Ireland.
ServiceCo says its business is managing Sky Bet’s advertising. So it registers for VAT in Belgium/Luxembourg/Ireland.14 There are actual people there, and they really do manage the advertising. SBG Sports Limited pays ServiceCo a commercial fee for doing this.
ServiceCo buys advertising and sponsorship – in theory there’s Belgium/Luxembourg/Irish VAT on this. But, because ServiceCo claims to be an advertising business, it can recover this VAT. ServiceCo therefore has no VAT cost.
ServiceCo then supplies the advertising on to SBG Sports Limited’s Malta branch. There are various ways to do this without triggering additional VAT – most likely ServiceCo sets up a branch15 in Malta which joins a VAT group with SBG Sports Limited’s Maltese branch. Thanks to a very handy legal interpretation by the Maltese authorities, the whole of ServiceCo (the branch and Belgian/Luxembourg/Ireland HQ) and the whole of SBG Sports Limited (the UK headquarters and the Maltese branch) become part of the VAT group.16 This means the advertising/sponsorship bought by ServiceCo is now on-sold by ServiceCo to SBG Sports Limited as an “intra-group supply”, and completely outside VAT.
The structure looks something like this:
We asked Sky Bet specifically to confirm or deny that it was taking steps to eliminate its VAT charge; we received a generic statement which declined to comment on the specifics. It’s therefore our working assumption that Sky Bet is avoiding that £24m of Maltese VAT. On that basis, the relocation is now saving £55m or more of tax every year.
Our team of experienced advisers would not have advised a client to adopt this structure; it is aggressive and likely susceptible to both HMRC challenge and/or change of law. The following sections consider how such challenges and changes could be made.
What can HMRC do to recover the corporate tax?
The starting point is that, under current law, if a business genuinely relocates to another country then it no longer pays UK tax on its profits.17
There are, however, important points of detail that we would expect HMRC to consider:
Usually if a business moves from a UK company to a foreign company there will be an immediate capital gains tax charge based on the increase in value of the business and its assets. Hestview Limited was in business for many years so we’d generally expect there to be a large “latent” capital gain. Probably for this reason, the snippet from the accounts above says that an IP licence was granted (as opposed to a sale of the business/IP). So what we expect is happening is that Hestview Limited is retaining ownership of the intellectual property that drives the business, but licensing it to SBG Sports Limited.18 That would be in exchange for a licence fee which would be subject to UK tax. The UK’s “transfer pricing” rules require that such a fee is on arm’s length terms – we expect HMRC would seek to argue that the licence fee should be a very significant percentage of SBG Sports’ foreign profits. That, however, would undo the corporation tax saving – so likely either SBG Sports has some more sophisticated structuring in place19, or will run arguments to minimise the licence fee.20
We understand that the senior staff of Hestview really have moved to Malta. However a large number of other employees remain in the UK. We would expect HMRC to consider whether an adequate amount of profit is being allocated to the UK business.21
It’s not uncommon for structures to be carefully designed on paper, but then the actual implementation to fall short. So, for example, if SBG Sports’ key decision-makers decide they are bored in Malta, and spend more and more time in the UK, then it may be that more of SBG Sports Ltd’s profits become attributed to the UK.22
Which is a long way of saying that a genuine relocation to Malta which still pays arm’s length (and probably very high) IP royalties to Hestview in the UK will be hard for HMRC to challenge – but such a structure would also present only limited tax savings for Sky Bet. A structure which aggressively tries to minimise the royalties paid to the UK would be more financially attractive for Sky Bet – but greatly increases the prospect of a successful challenge.
What can HMRC do to stop the VAT avoidance?
It’s important to note that we do not know if Sky Bet is using the VAT avoidance structure outlined above – this is our speculation (which Sky Bet pointedly did not deny). However we are reasonably certain that at least one other group is currently using a structure of this kind.
The EU and UK VAT systems are not supposed to enable businesses to magically make their VAT cost disappear. It is entirely proper for the UK to find any way it can to block this kind of structuring, either under current law or by changing the law.
Under current law, we’d expect HMRC to investigate whether the advertising services supplied to entities like ServiceCo are really being supplied to Belgium/Luxembourg/Ireland, or to a “fixed establishment” in the UK. This again will in large part come down to how carefully the structure is implemented.
Recent history has been that HMRC has failed to successfully challenge this kind of avoidance. VAT is a creation of EU law, and EU law has only enabled tax authorities to attack the most highly artificial types of VAT avoidance. So, for example, the UK Government passed legislation in 2019 aimed at stopping “offshore looping” by insurance brokers – routing arrangements through an offshore company to avoid VAT. That’s fairly close to the structuring we believe Sky Bet may have used. A tax tribunal recently held in the Hastings case that the 2019 legislation was contrary to EU law, resulting in a £16m VAT refund for Hastings.23
The upshot is that, as one adviser told us – “VAT avoidance is okay even if ‘blatant’ – as long as you do it right”. This should change. There’s no reason, post-Brexit, that UK VAT rules should accept that “blatant” VAT avoidance is “okay”. The Government should legislate:
overriding those features of EU law which facilitate VAT avoidance (and make this retrospective, preventing further claims based on Hastings), and
enabling HMRC to require UK businesses invoicing offshore companies to apply UK VAT in cases where HMRC can identify that abuse has taken place. The offshore company could then claim a refund to the extent that foreign VAT is actually paid.
Is it lawful?
It is common for reporting on corporate tax avoidance to say that there is no suggestion that tax planning is unlawful. That is not necessarily the case here.
There appears to have been an element of concealment in how Sky Bet/Flutter has described the arrangement. The public version is that the relocation to Malta is being executed for “strategic reasons” (and more on that below). Sky Bet’s staff weren’t told that tax was a factor. However, ITV’s source at Flutter is clear that tax was in fact the real motivation:
“Tax was the elephant in the room. It was absolutely understood, across everyone affected, indirectly affected or even aware of it… that this was about tax.“
Our industry sources, and our panel of experienced tax experts, believe that this is likely correct.
If Sky Bet told HMRC that the arrangement wasn’t driven by tax, but it in fact was, then that was improper and potentially unlawful.
Ending offshoring by gaming companies
The current situation is irrational. It’s easy for a business providing gaming to UK consumers to move offshore, and save large amounts of corporation tax. That loses tax revenue; it also puts UK-based operators at a commercial disadvantage, giving them a large incentive to move offshore. This is not in the UK’s interest.24
It would be easy to reverse this: the Government could equalise all UK duties and tax for onshore and offshore businesses that provide internet/remote gaming services. There are two ways this could work.
The first and “neutral” way would be to raise gaming duties for internet gambling, make the duties non-deductible for corporation tax, but instead make them fully creditable against corporation tax (and foreign corporate taxes).25 Say the rate of betting duty was 19.6% – Sky Bet’s UK business in 2024 would then have paid £58m of corporation tax plus £56m of gaming duty.26 That’s £114m in total – the same as it paid under the current rules. But if Sky Bet had moved to Malta then it would have paid £8m of Maltese corporate tax plus £106m of gaming duty – again £114m. The corporate tax advantage of moving offshore has disappeared.27 In fact staying in the UK, or moving back to the UK, would save most businesses money – because operating in tax havens like Malta tends to be awkward and expensive.
The more aggressive approach would be to credit corporation tax but not foreign taxes. So moving to Malta would increase Sky Bet’s taxes, and offshore gaming companies with UK customers would reduce their tax if they moved to the UK. This kind of approach would be prohibited by EU law if we were still a member of the EU; but of course we are not.
Either approach would put an end to offshoring by internet gaming companies, and encourage relocation to the UK.2829
Sky Bet’s response
We asked Flutter, Sky Bet’s owners, for comment. They sent this reply to us and to ITV News:
“Flutter paid more than £700 million in taxes to HMRC last year and we employ over 5,000 people across the UK including almost 2,000 in Leeds and 600 in Sunderland.
As with most global businesses around the world, we are constantly striving to remain competitive and efficient and to give ourselves the best chance of success in an incredibly challenging environment.
The challenge we face is only made harder by the recent Gambling Act Review, the significant rise of illegal, unregulated black-market competitors and the possibility of tax rises in the Budget.
In June this year, after migrating Sky Bet onto the same technology platform as our other brands, we decided to move a number of commercial and marketing roles to our commercial centre in Malta – where Flutter already employs over 750 people.
This decision was made for a number of strategic and commercial reasons and will have some tax implications. But Flutter is committed to the UK and Sky Bet will continue to pay UK corporation tax on its profits.“
This is unconvincing. The new SBG Sports Limited was established in May 2025, long before the various Budget rumours started circulating. Any measures arising from the Gambling Act Review – new duties or regulation – will apply to gambling businesses with UK customers, regardless of where they are based.
We told Sky Bet we thought they were saying something that wasn’t true, and if they had given a false explanation to HMRC then that could have serious consequences. They didn’t like our characterisation, but didn’t provide any further explanations. They haven’t denied putting a scheme in place to avoid the VAT.
All of this adds to our sense that Sky Bet is hiding the true reason for its move.
Many thanks to Joel Hills at ITV – this story only exists because he spotted the Malta migration. And thanks to A O, K and M for their insights on the gaming industry and its tax treatment.
Historically, Hestview was the UK-licensed bookmaker in the group and the entity that licenced the “Sky Bet” brand from Sky plc. The accounts say Hestview was the “economic beneficiary of the Sky Bet brand”. It seems the position is now that SBG Sports Limited runs the sports betting business, Bonne Terre Ltd (a company incorporated in Alderney – part of Guernsey with particularly favourable gaming regulation) the egaming/casino business, and Hestview has retained “free to play” business. ↩︎
We are using round numbers throughout but they are representative of the actual figures. ↩︎
i.e. because sports betting is VAT exempt in the UK and so Sky Bet cannot recover the VAT. If this was (eg) a supermarket buying advertising then it would recover it. A further point of detail: if any advertisers were outside the UK then Sky Bet would “reverse charge” the VAT – so the UK Sky Bet business would always be subject to irrecoverable UK VAT on its marketing spend. ↩︎
Or possibly an error in the accounts, with someone writing “SBG Sports (Malta) Limited” instead of “SBG Sports Limited, Malta branch”. Either way, we can find no record of an “SBG Sports (Malta) Limited” in the UK, Malta, or anywhere else. ↩︎
A branch isn’t a legal entity – it’s just a place where you operate. Banks often have branches because of the way bank regulation works (e.g. most of the world’s largest banks have branches in London). Some other regulated sectors do this too (insurance in certain cases). But outside of this kind of case, branches are unusual, and often a sign of tax/VAT avoidance. ↩︎
This is probably why they picked Malta rather than Alderney, even though Alderney tax and regulation is more straightforward (and in practice usually zero tax). You can’t realistically move dozens of employees to Alderney – the island is just too small. You wouldn’t be able to achieve the “substance” that is realistically required to escape UK corporation tax and VAT. ↩︎
Possibly the intention is that the company becomes Maltese tax resident. The UK/Malta double tax treaty has an old-fashioned “place of effective management” tie-breaker. Modern treaties have an anti-avoidance provision created by the OECD BEPS Project which means that tax authorities have to agree any shift in corporate residence. However our industry sources expected that wouldn’t be the planning here, and the entity was in fact intended to remain UK resident with a Maltese branch. More on the reasons for this below. ↩︎
Malta is not a normal country – only a few years ago, a journalist investigating corruption was murdered by a car bomb. The EU Commission shouldn’t permit Malta to engage in aggressive tax competition, like having a de facto 5% rate of corporate tax, and manipulating VAT grouping rules. However it seems unlikely we’ll see any action in the short term. ↩︎
Of course a branch doesn’t pay a dividend – SBG Sports Limited, the UK company, would pay the dividend. We’re assuming that “counts” for Maltese purposes (perhaps because they regard the dividend as having a Maltese source, and/or reflecting the underlying Maltese corporate income tax. We don’t know who currently owns SBG Sports – it was initially Bonne Terre in Guernsey/Alderney). ↩︎
In principle the tax benefit should be greatly limited by Pillar Two, the OECD 15% minimum tax. We’re still in the first few years of implementation, so it’s hard to say what is happening in practice here. One possibility is that Sky Bet really is paying 15% tax on its profits (in Ireland or some other jurisdiction); in that case VAT may be central to the structure. The other possibility is that a structure and/or accounting methodology is being used that minimises the impact of Pillar Two (and that may be linked to the unusual decision to use a Maltese branch rather than a Maltese company). We expect this kind of question will have answers in a few years, but for now all we have is intuition: and our intuition is that Sky Bet/Flutter are doing something to mitigate the 15%. ↩︎
On the basis it makes taxable supplies to SBG Sports Limited. ↩︎
This branch would solely be a tax play. ServiceCo has maybe a couple of people doing something that can be justified as a real activity (for example managing advertising for a particular (small) part of Sky Bet’s business). ↩︎
There are numerous exceptions, of course, particularly if the business is ultimately owned by a UK individual or company, or if it holds UK real estate. However for a foreign-owned trading business, the general proposition is broadly correct. ↩︎
Which then makes the IP available to its Maltese branch. ↩︎
There are clear signs of that. Why use a branch rather than a Maltese company? One reason is – we would speculate – that it means that there’s no Maltese VAT on licence fee payments, because the IP is routed from Hestview Limited, via SBG Sports Limited’s UK headquarters to its Maltese branch. The UK companies would likely be VAT-grouped (so no VAT there). The arrangement between SBG Sports Limited in the UK and its Maltese branch would be an intra-entity transaction, and therefore not subject to VAT. It’s possible that the branch is also part of the direct tax planning. ↩︎
This is the opposite of the structuring used by many foreign companies with businesses in the UK, where they seek to maximise the licence fee paid by the UK operating business to the foreign owner of intellectual property. ↩︎
And there will be branch allocation issues unless SBG Sports Ltd is Maltese tax resident. However we wonder if the intention is in fact that the company remain UK tax resident. If they are careful about substance, the diverted profits tax (originally announced as a “Google tax“) wouldn’t then apply, because SBG Sports Ltd would be a UK company with a foreign branch, not a foreign resident company. ↩︎
And if it is intended to be Maltese tax resident, it may accidentally become UK tax resident. ↩︎
Hastings UK was making supplies (back office insurance related) to a non-EU insurer. Until 2019, these supplies were “specified”, meaning that there was VAT recovery, even though these services would be exempt in the UK. Hastings – and many others – took advantage of that by “looping” supplies to UK clients via non-EU entities, solely to achieve recovery. The law was changed in 2019 to stop these structures – recovery would only be permitted where the ultimate customer was outside the EU. The FTT decided in Hastings that EU law prevented UK VAT law from looking at the ultimate recipient of supplies. The “Offshore Looping Order” was held to be ultra vires because it wasn’t compatible with the Principal VAT Directive – the UK couldn’t restrict input tax recovery by looking through to the ultimate insured when the Directive didn’t. ↩︎
This is regardless of our position on whether we should encourage or suppress gaming generally; the question is whether the gaming industry that we do have should be onshore or offshore. ↩︎
It would only be the corporation tax on the gaming-duty-relevant profits that was creditable. ↩︎
The corporation tax figure is 25% x its 2024 profits (ignoring its deduction for gaming duty). The gaming duty figure is 19.6% of £580m, minus the £58m of corporation tax. ↩︎
It might be argued this breaches the UK’s double tax treaty with Malta. That is probably incorrect, because gaming duty is not a tax on profits. However the point is academic: even if gaming duty were (for some reason) regarded as a tax on profits, there’s no route to any appeal under UK tax law, because gaming duty is not one of the taxes which can be overridden by tax treaties. ↩︎
One side-effect of moving from corporation tax plus duties to pure duties is that operators with lower margins would pay a higher effective rate, and more efficient/higher-margin operators would be favoured. Given the essentially similarity of internet gaming businesses, this is significantly less problematic than it would be to (for example) tax digital companies on a gross revenue basis. ↩︎
An additional step that could be taken is to amend the diverted profits tax so section 86 applies to artificially structured foreign branches of UK companies. ↩︎
Tax Policy Associates is an independent, non-profit think tank using legal and tax expertise to reform tax policy, investigate stories, and improve the public understanding of tax. We accept no donations, charge no fees, and undertake no commercial work.
Dan Neidle is a former head of tax at a major global law firm and the founder of Tax Policy Associates. He is known for detailed analysis, investigations and clear explanations of complex tax issues in the UK and beyond.
“Neidle” is pronounced to rhyme with “knitting needle”.
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This online calculator calculates your tax on employment, self-employed or partnership income, and shows how it changes under a variety of Budget proposals. It charts the marginal and effective tax rate at all income levels, and shows where you fall on that chart.
Now updated for the actual Budget, with rates for 2026/27 rates and 2027/28 (assuming the only changes are those announced in the Budget to property, savings and dividend rates).
The charts show that teachers, doctors and others earning fairly ordinary salaries can face marginal tax rates of more than 60%, and sometimes approaching 80%. We believe it’s inequitable and holds back growth. Rachel Reeves should commit to ending these anomalies.
This Government was elected on a platform of kickstarting economic growth. It has a large majority, and probably four years until the next election. It’s a rare chance for real pro-growth tax reform. That’s all the more necessary if we are going to see tax rises.
It’s important to note: the point of the tax calculator is not that UK tax rates are currently too high. Overall they are not; they’re low by international standards, and the average worker pays less tax on income than their equivalents in other countries. But there are earning levels at which there are anomalously high rates, and that is damaging.
When it starts up, the chart shows the current UK tax marginal rates at each income point. You can enter your income and see your tax result1, and your position on the chart. You can use the “tax rules” dropdown to select:
The 2023/24 rates.
The Scottish current or 2023/24 rates.
The IFS suggestion to increase income tax by 1p (it’s one of several options, not a proposal as such).
The app will then chart the marginal rate at each income point or (if you change the top left dropdown) give you a chart of effective rate at each income point, or net income vs gross income.
You can select a scenario in the “compare against” dropdown, and that scenario will be added to the chart (dashed red line).
The options
You can select options that demonstrate some of the features in our tax system that create anomalously high marginal tax rates:
You can choose whether you’re employed, self-employed, retired, a contractor paid under “IR35“, or a member of a partnership/LLP.
Once you increase “number of children” above zero, you see the effect of child benefit.2 This increases the income of anyone with children under 16 (or under 20 if in approved education or training) but, once their income (or that of a cohabiting partner) hits £60k, the “high income child benefit charge” (HICBC) starts to claw child benefit back. It’s completely gone by £80k. That creates a very high marginal tax rate at £60k – 58% for someone with three children, and 67% if they also have a student loan.
If you add “childcare subsidy” you can model the impact of the tax-free childcare scheme and the various Government free childcare hours schemes in England, Wales and Scotland.3 These schemes are generous – potentially worth £20k in some cases, and we classify that as increasing your income (and therefore reducing your effective tax rate). However the schemes are completely withdrawn if income exceeds £100k (with the exception of the Scottish scheme4). That creates the very odd effect that someone using the schemes becomes worse off if their income exceeds £100k – a marginal tax rate well in excess of 100%.5
The “marriage allowance” option deals with the small element of personal allowance sharing between married couples.
And anyone earning £100k sees their tax-free personal allowance reduced, by £1 for every £2 of income above £100k. This isn’t an option – it happens automatically. It means the marginal rate at £100k is 62%, falling back to the “correct” amount of 47% once the personal allowance is completely gone at £125,140.
What the marginal rates mean
The “marginal tax rate” is the percentage of tax you’ll pay on the next pound you earn.7 is withdrawn results in nonsensical marginal rates It’s therefore critical because it impacts your incentive to earn that pound. It’s obvious that if 100% is taxed you’ll have a lower incentive than if 0% is taxed; and the.same is true for 70% vs 40%. We’ve written a fuller explanation of the precise meaning of “marginal tax rate”, and why it’s so important.
If you turn on all the “options” you’ll see a series of very high marginal rates across the UK, over 70% in some cases. The rates are even higher in Scotland (the red dashed line):
The marginal rate from the marriage allowance and the childcare subsidies is so high that it goes off the above chart. So it’s clearer if we plot net income vs gross income:
The marriage allowance is so small that it’s invisible in this chart (it’s a largely pointless piece of complication). The withdrawal of childcare subsidies, however, completely distorts the picture. When you earn £100k, you immediately lose these. So in this chart, with someone receiving £20k-worth of childcare subsidies, they are suddenly £20k worse off when they earn £100k, and their net income doesn’t recover to where it was until their gross income reaches £152k (or, in Scotland, £170k.8)
There are other minor effects which, for simplicity, our calculator does not cover.9
One issue not covered by the calculator is the high marginal rates impacting working people receiving benefits (other than child benefit). This improved significantly after the introduction of universal credit, but problems remain, particularly around the interaction with child benefit. Benefits are outside our expertise and therefore are not covered by this article or our calculator.
What are the real world effects?
Thanks to a recent series of Freedom of Information Act applications by Tom Whipple at The Times, we can see that large numbers of people take steps to avoid these high marginal rates:
That pronounced “bump” at £100k represents approximately 32,000 taxpayers managing their income so it doesn’t go past £100k. However it’s important to recognise that counting the people in the “bump” gives us a lower bound: there will be others who hold back their income above or below the £100k point, but outside the visible “bump”. There will be others who respond to the incentives by ceasing working altogether or leaving the UK (anecdotally there are large numbers of professionals moving to Dubai; however there’s no hard evidence as to the scale of the effect).
This, however, is nothing compared to the “bump” at £50k – there are 230,000 taxpayers there. Again this is a lower bound.
This is from tax year 2022-23 when the child benefit clawback was at £50k – this will be an important cause of the bump, but we expect there are three others.10
These “bumps” reflect broadly three taxpayers responses:
No change in economic activity (i.e. working hours) but taking steps to legally reduce taxable income. The most obvious example is making additional pension contributions and/or salary sacrifice. Additional pension contributions are an attractive option to people nearing retirement, but unattractive for people at the start of their careers.
No change in economic activity but tax evasion – i.e. self-employed people artificially depressing their income by not declaring income over £50k to HMRC.11
Actually reducing their income – for example self-employed contractors turning away work, or employed staff working fewer hours (or even, in at least three cases we’ve heard of, refusing promotions).
Both outcomes reduce the tax people are paying. However the second outcome has an obvious wider effect – it’s reducing the supply of labour.
We’ve heard anecdotally from managers unable to persuade staff to work more hours, or return to work full time – it’s a particular problem for hospital managers, as junior consultants’ pay is within the £100k “trap”.
But it’s important not to just focus on the impact on jobs that we might think are of particular societal importance.
It’s also problematic if an accountant or estate agent turns away work because of high marginal rates – it represents lost economic growth and lost tax revenue.12 It also makes people miserable.
Inflation and frozen thresholds mean the problem is getting worse each year – the data The Times obtained shows much larger “bumps” in 2022/23 compared to 2021/22. So 2025/26 will be considerably worse:
What’s the solution?
These problems are getting worse over time, as fiscal drag takes more and more people into the thresholds that trigger these high marginal rates.
This creates a double problem. First, the economic distortions created by the high marginal rates start to impact into mainstream occupations (doctors, teachers). Second, the revenues raised by the marginal rates are now so great that they become hard to repeal.
Ending the high marginal rates in one Budget is, therefore, not realistic – particularly in the current fiscal environment. The cost of making child benefit, the personal allowance, and childcare subsidies universal, would be expensive (somewhere between £5-10bn, depending on your assumptions). The obvious way of funding this – increasing income tax on high earners, appears to have been ruled out.
We would suggest five modest steps:
An acknowledgment that the top marginal rates are damagingly high, and that the Government will take steps to reduce them when economic circumstances permit.
Some immediate easing of the worst effects, at minimal cost to the Exchequer, for example by smoothing out the personal allowance taper over a longer stretch of income, therefore reducing the top marginal rate, and slightly increasing the additional rate so that the measure is revenue-neutral overall.
A commitment to uprate the thresholds for clawback of child benefit, personal allowance and childcare subsidy in line with earnings growth or inflation.
A commitment that no steps will be taken to make the high marginal rates worse, or create new ones.
A new rule that Budgets will be accompanied by an OBR scoring of the highest income tax marginal rates before and after the Budget.
There’s a coherent political case for people on high incomes paying higher tax (whether we agree with it or not). There is no coherent case for people earning £60k, or £100k, to pay a higher marginal rate than someone earning £1m. It’s inequitable and economically damaging. Ms Reeves should call time on high marginal rates.
Code
The code for the calculator is available here. If you want to experiment with different rates you can download all the files and run “index.html” locally. You can then edit “UK_marginal_tax_datasets.json” and add different scenarios.
The data showing the “bumps” is available here. Many thanks to The Times for sharing it with us, and letting us publish it.
Footnotes
Please note that the calculator is intended to illustrate tax policy. It is not designed to actually calculate your tax for your tax return, and should not be used for that purpose. ↩︎
Note there is no limit on how many children you can have for child benefit purposes – and that produces some extremely high marginal rates if you select e.g. six children. ↩︎
The way the childcare free hours schemes work is complex and varies considerably from individual-to-individual – the calculator doesn’t attempt to provide a detailed analysis but simply lets you enter the amount of overall subsidy. ↩︎
Which provides up to 1140 hours of free childcare. This isn’t means-tested. However the tax-free childcare scheme is means tested, even in Scotland. ↩︎
It can be expressed as 2,000,000% if we look at the loss of income for someone with £20k of free childcare who was earning £100k but receives a £1 pay rise. However in reality the concept of a marginal tax rate has little meaning in such circumstances. ↩︎
Noting of course that Scottish students don’t have to pay tuition when studying at Scottish universities, so their student loans will be much lower. The full rate is really only relevant to graduates who studied elsewhere in the UK and then move to Scotland. ↩︎
The calculator calculates your marginal rate over £100 rather than £1. That’s necessary because the personal allowance taper reduces the personal allowance by £1 for every £2 of income over £100k. If the marginal rate is calculated over £1 then it produces a different result for even numbers than odd numbers, which doesn’t make sense. The choice of £100 is arbitrary, but has no effect other than to change the (essentially meaningless) childcare subsidy marginal rate. ↩︎
Although the Scottish childcare scheme is less generous and so this problem is usually less extreme in Scotland. ↩︎
The £1,000 personal savings allowance drops to £500 once you hit the higher rate band, and to zero once you hit the additional rate band. The £5,000 starting rate for savings tapers out, but slowly, and so it just somewhat increases the marginal rate – it’s also less relevant for most people. ↩︎
First, people responding to the increased marginal rate of the higher rate tax band – but this effect should be small (when the marginal rate rises from 28% to 42% that means take-home pay on the next pound is reducing by about 20%). Second, people irrationally responding to the higher rate band – we found evidence that a large number of people believe that when you cross the higher rate threshold, you pay a higher rate of tax on all your income. Third, owners of small/micro businesses whose income fluctuates year-by-year managing the profits they take out so they don’t cross the higher rate threshold. It should be possible to definitively establish the impact of child benefit clawback when we obtain data on 2024/25, the first year when the child benefit clawback threshold was moved to £60k. ↩︎
It ought to be possible to check the extent of this by comparing the data for taxpayers on PAYE with other taxpayers, i.e. because tax evasion is not generally practicable for people on PAYE. A more sophisticated analysis would look at the way reported taxable income changes over time, as the income increases and as it decreases. ↩︎
Particularly when the economy is running at very little spare capacity; it would be different if there was high unemployment/plenty of spare capacity, because the work that was turned away would (at least in theory, in the long term) be undertaken by others ↩︎
![Richard Tice MP * @ § © TiceRichard: th xX
Desperate still to smear me & Reform, Sunday
Times has again spent weeks pouring over my
company accounts with Labour-supporting tax
accountant
All that effort has revealed overall HMRC received
the correct amount of tax due
Journo now effectively complaining | paid too much
tax rather than company pay some tax on my
behalf! All due to complex tax technicality around
dividends to certain shareholder classes in REITs
But S Times refuses to investigate serious
accounting irregularities & possible multi million
pound electoral law breaches by Labour Party
Properties Ltd, that | exposed
Meanwhile, I'll get on with representing the people
of Boston &Skegness & campaigning to kick out
this dreadful government
O 72 thes OK ih] 20K N](https://taxpolicy.org.uk/wp-content/uploads/2026/04/IMG_4082.jpg)
![Dan Neidle
Request for comment - Badoume v HMRC
To: infocaxvelcomeaccountancy co uk
Dear Mr. Omar Ali and Mr. Shaukat Ali,
| am the founder of Tax Policy Associates, a think tank established to improve UK
tax policy.
We are writing in relation to the First-tier Tribunal decision in Badoume v HMRC
[2026] UKFTT 484 (TC), which refers to “Welcome Accountancy Services”
The Tribunal found that your firm submitted tax returns “knowing that the expense
claims made were inaccurate”, described the claims as “a figment of the
imagination”, and rejected your asserted “20%” expenses approach as implausible.
The Tribunal also noted that you admitted destroying client records after six months,
recorded “almost zero engagement” from you and that neither you nor your client
attended the hearing.
We intend to report on this decision and will be calling for HMRC and other
authorities to consider whether a criminal investigation is appropriate.
Do you accept or dispute these findings, and can you explain your failure to engage
with the Tribunal process?
Also: you describe yourselves as “certified accountants”, but we can find no
evidence you are recognised by the ACCA. Can you please clarify your status?
Please reply by 5pm today.
Yours sincerely,
Dan Neidle
Dan Neidle
TAX Tax Policy Associates Ltd
G oot ey ATES dan@taxpolicy.org.uk | taxpolicy.org.uk
Acongcolnco ean, Teer by quecamer. ne “4.535%
Reqeeet Mee “24 Oly Boat Locenn ECTS ZNX](https://taxpolicy.org.uk/wp-content/uploads/2026/04/Screenshot-2026-04-05-at-17.57.40.png)
![lf you have a property portfolio with 4 or more
properties, did you know it’s possible to:
© Reduce the 40% Inheritance Tax rate to *
# Reduce the 24% Capita) Gains Tax rate to
# Reduce Stamp Duty to 1
(UR approach
1, Paromita 1 Yam]
2 lncarparation
3 teu thereafter)
4. Share Plann
ha
Ngee FOR SALE](https://taxpolicy.org.uk/wp-content/uploads/2026/03/slide_sdlt_partnership.jpg)
![What lop Closers Want Ilo See -
Growth
A company scaling fast with verified momentum.
A market opening wider every year.
An income opportunity that compounds as we expand.
A business model where elite performers rise quickly.
This is what momentum looks like and we're still early.
Profit and Loss
MEE atare Panny ett
Dew tre wae orate WI Agee Meh
a 3] 1660 100 46 Vet 77 62 478 162 8
strong
Documented Revenue
Growth (2024 — 2026 YTD)
2023/2024: £479k
2024/2025: £1.46M (+300%)
2026 YTD: £1.66M+
(+500%)
Passed Last Year
with 6 months to go!
We NP ESTATE
*Q PLANNING UK
Reaititvwthicchie WwW
Every Home In A Trust](https://taxpolicy.org.uk/wp-content/uploads/2026/03/figures_from_recruitment_video.png)
![In light of the reputational harm caused, which easily passes the threshold of “serious harm” under Lachaux v
Independent Print Ltd [2019] UKSC 27, | require the following steps to be taken within 7 days:
1. Publication of a clear and public confirmation of your sincere belief that | am the leading barrister in the
field of taxation in the country, as previously stated, and a sincere apology for your misleading and disparaging
remarks;
2. Retraction or substantial amendment of the headline and body of the article so as to remove the defamatory
implications it currently conveys;
3. Publication in full of my letter to the Information Commissioner, together with acknowledgment of the
outcome of the BSB investigation;
4. Written confirmation that you shall apply higher editorial standards in the future, and that no further false or
misleading references to any persons will be made in your publications;
5. Undertaking to make the following payment: you shall undertake to pay 80% of any amounts which my
regular or historic clients represent to you, in writing, as amounts they would have paid to me under an
engagement with me, but did not do so because of your publications.
Should you fail to take these steps, | will proceed without further notice to pursue all remedies available to me,
including injunctive relief, damages, and costs.](https://taxpolicy.org.uk/wp-content/uploads/2026/03/image-32-2000x994.png)
![18.
However I agree with Mr Callus that I am bound as a matter of law to apply the rule in
Charleston to Mr Kamal’s pleadings. The last two sentences of [4] of his particulars
of claim, whatever he intended by them, read as plainly and irremediably inconsistent
with the rule. I do not consider they can survive a strike-out application. They are bad
inlaw. As such, they disclose no reasonable grounds for bringing a libel claim in those
terms and are certain to fail.](https://taxpolicy.org.uk/wp-content/uploads/2026/03/image-34.png)
![31.
In the circumstances, the pleading that it was ‘false and misleading’ to suggest that a
judicial finding of breach of duty had been made against him is incapable of forming a
part of the just disposal of Mr Kamal’s libel claim. The attempt to do so is an abuse of
the court’s processes. I grant the Defendant’s application to strike out [5(b)] of Mr
Kamal’s particulars of claim.](https://taxpolicy.org.uk/wp-content/uploads/2026/03/image-36.png)
![34.
35.
Mr Kamal did not engage with the substance of this objection before me. Mr Callus is
undoubtedly right as to the law. To order an apology would be a form of compelled
speech which clearly engages the Article 10 ECHR rights of defendants. There would
have to be an identifiable basis in law for a court to be able to do it. There is none. A
court has no such power.
I grant the Defendants’ application to strike out [14] of Mr Kamal’s particulars of claim
(and the equivalent parts of the claim form). It is bad in law and certain to fail.](https://taxpolicy.org.uk/wp-content/uploads/2026/03/Screenshot-2026-03-12-at-07.58.06.png)
![84.
85.
I have thought particularly hard about this last point because, in his written and oral
submissions to me, Mr Kamal laid great emphasis on his principal objection to the
Article being its association of him with the Arka Wealth scheme it critiques. He says
he did not devise or advise on that scheme, and the Article suggests he did. I can see
that Mr Kamal might have pleaded (I do not necessarily say as to any particular
outcome) not only the generalised meaning he in fact pleaded at [6(a)] but also a factual
allegation setting out that (as he complains) he invented, promoted or advised on a
specific scheme and an associated expression of opinion that that particular scheme was
unlawful or discredited. That would be a worse meaning than he has in fact pleaded,
so there can be no real prospect a court would find such a meaning.
Mr Kamal might have pleaded single natural and ordinary meaning in a number of
respects which are worse than he has in fact pleaded (professionally-advised libel
claimants tend to plead meanings which are as high as they consider plausible short of
extravagance, precisely because they know they set a ceiling on a court’s
determination). A court is meaningfully limited in law by a claimant’s pleaded
meaning. Mr Kamal has made choices about the claim he is asking the Defendants to
address and the court to consider. His pleading of meaning in his particulars of claim
is not technically deficient as such — it does not require remedial amendment in order
to set out a case it would be fair to ask a defendant to defend. But it does delineate the
claim he himself has chosen to advance. I can consider the claim he has pleaded. I
cannot on a summary judgment application consider speculatively different claims he
might have pleaded but did not.](https://taxpolicy.org.uk/wp-content/uploads/2026/03/media-XXXXXXXX.QPtl5QAsB4.jpg)
![87.
88.
The first is the point of principle that, their Art.10 rights being engaged, courts ought
not to strive officiously to impute factual allegations to defendants where, informed by
the context of a publication read as a whole and by the ceiling imposed by a claimant’s
own pleading, it is straightforward to recognise that an ordinary reasonable readership
would have no difficulty in understanding they were receiving defendants’ opinions. A
court ‘should be alert to the importance of giving free rein to comment and wary of
interpreting a statement as factual in nature, especially where as here it is made in the
context of political issues’ (Yeo v Times Newspapers Ltd [2015] 1 WLR 971 at [97] per
Warby J (as he then was)). The subject matter of the present Article is not (party-
)political in the narrow sense, but it does avowedly enter the sphere of public policy
debate and law reform. In any event, the scheme of the statutory defences in the
Defamation Act 2013 is itself a recognition of the respect due to free speech in the form
of expression of opinion, the protection of which should not be ‘whittled away by
artificially treating comments as if they were statements of fact’.
The second reason lies in the structure of section 3 of the Act itself. The issue of basis
of opinion is something different from the prior question of fact/opinion, and courts
necessarily have to be careful not to elide the two. It is to the issue of basis of opinion
(section 3(3)) that I turn next.](https://taxpolicy.org.uk/wp-content/uploads/2026/03/Screenshot-2026-03-12-at-08.00.55.png)
![in accordance with
Rules 6.2, 6.3 &6.5 of
the Insolvency (England
& Wales) Rules 2016 and
Sections 95 & 99 of the
insolvency Act 1986.
LIQO2
Notice of statement of affairs
Companies House
For further information, please
refer to our guidance at
www.gov.uk/companieshouse
1 | Company details
Company number
1{1[ol7[s5[ol[sle
Company name in full
Purity Ltd
+ Filling in this form
Please complete in typescript or in
bold black capitals.
2 | Liquidator’s name
Full forename(s)
Edward
Surname
Avery-Gee
3 | Liquidator’s address
Building name/number
27 Byrom Street
Street
Post town Manchester
County/Region
Postcode u [3 | [a [P[F|
Country
4 | Liquidator’s name o
Full forename(s)
Nick
Surname
Brierley
}@ Other liquidator
Use this section to tell us about
another liquidator.
5 | Liquidator’s address @
Building name/number
27 Byrom Street
Street
Post town Manchester
County/Region
Postcode u[ 3 | [4] P| F| |
Country
@ Other liquidator
Use this section to tell us about
another liquidator.
04/17 Version 1.0](https://taxpolicy.org.uk/wp-content/uploads/2026/01/upload_156f6b18-95cf-4512-a562-1cdb02374ca6.jpg)
![(3) [F7 sections 223 and 223B] shall not apply in relation to a gain if the acquisition of,
or of the interest in, the dwelling-house or the part of a dwelling-house was made
wholly or partly for the purpose of realising a gain from the disposal of it, and shall
not apply in relation to a gain so far as attributable to any expenditure which was
incurred after the beginning of the period of ownership and was incurred wholly or
partly for the purpose of realising a gain from the disposal.](https://taxpolicy.org.uk/wp-content/uploads/2025/12/upload_5b8222f9-5a9b-47d8-bd77-1389fb3a9e84.jpg)
![Oy Samuel Leeds @ t Follow ] vo
"tf @samuel leeds
At the moment, 92% of my real estate is held in the Uk.
My 2030, my goal is for that number to be 60%
As much as | love UK real estate, it’s important to
diversify into different markets.
| have a trust set up to hold them to pass generational
wealth, today I’ve been on multiple viewings and been
putting forward embarrassingly low offers on prime luxury
properties.
Don’t wait to buy real estate, buy real estate and wait }](https://taxpolicy.org.uk/wp-content/uploads/2025/11/1720852696714.jpeg)
![Rowan Morrow-McDade {) - 1st
Tax Director at Alexander & Co | Chartered Tax Adviser | Chartered Acco...
PR 30- Edited - ©
"Guru" Samuel Leeds is now sharing property tax advice on Instagram. Let's see
how it stacks up:
"Buy an unlivable house for about £150k that's been empty for over two years.
Because it's unhabitable, you pay no Stamp Duty”
Completely incorrect. The recent Court of Appeal decision of Mudan [2025]
showed that remedial work - however extensive - does not in itself make a
property non-residential. The courts consider whether a building retains the
essential characteristics of a residential property. Only in very extreme cases of
structural disrepair will a property be considered not a "dwelling" for SDLT
purposes.*
"Only pay 5% VAT on refurb costs as the property has been uninhabited for 2+
years"
This is in fact true - but it only relates to structural repairs/renovations. It doesn't
apply to things like carpets or fitted bedroom furniture, or landscaping the
garden.
"Spend around £50k, fixing it up while making it your primary residence. Sell
once finished for around £100k profit, tax free because it's your main residence"
No - wrong again. The Capital Gains Tax exemption for main residences “shall
not apply in relation to a gain if the acquisition of... the dwelling-house ...was
made wholly or partly for the purpose of realising a gain from the disposal of
it"r*
So if HMRC argue that you bought the house to make a profit from it, they will
deny the exemption, giving you a 24% Capital Gains Tax bill on sale. In a worst
case (see the title of Samuel's post "How the rich flip houses") then HMRC can
tax it as trading income at up to 47%.](https://taxpolicy.org.uk/wp-content/uploads/2025/11/upload_9e3d3791-6701-4ff8-8952-0948acc49340.jpg)
.jpg){kind=link}
