There has recently been some controversy regarding Richard Tice, the Brexit Party chairman, and his potential connections to tax havens. It is no secret that many high net worth individuals use tax havens as a way to minimize their taxes and maximize their profits. Even so, these types of connections can hurt the reputation of the high net worth individuals in question.
The Investigation by openDemocracy
The controversy regarding Tice and tax havens comes following an investigation conducted by openDemocracy. That investigation showed that two offshore companies have significant shareholdings in Tice’s family’s business.
The Two Sides of the Controversy
Those who oppose connections to tax havens have called for Tice to address the issues urgently and to step down from his position on the Economic and Monetary Affairs Committee of the European Parliament. The Tax Justice Network is among those who demand clarification. One member of that organization, John Christensen, pointed out the sharp contrast between Tice’s involvement in Brexit, where proponents want to “take back control” with the use of offshore tax havens, which undermine Britain’s parliamentary democracy.
Following the release of the investigation results, Tice indicated that he did not know anything about the offshore companies involved. According to Tice, those companies have held their shares in the family business for over 25 years. Now, those two companies own 42 percent stake (combined) in Sunley Family Limited. According to Tice, there is no financial interest in those offshore companies.
Others want more information but would like to take certain precautions in the meantime. MEP Molly Scott Cato, from the same Economic and Monetary Affairs Committee, called for Tice to temporarily stand down from his role on this committee until investigations can confirm that Tice does not take advantage of tax havens. She indicated that dodging taxes via tax havens would involve an undeniable conflict of interest, given the committee’s role in overseeing EU tax policy.
Additionally, Tice has denied that he sets up his dividends to channel through tax havens. He indicated that he pays tax in the UK and that neither he nor his family receives dividends from the companies, so they could not be placing them through tax havens.
More About Sunley Family Limited
Sunley Family Limited saw Richard Tice serve as its director for 25 years, ending in 2017. He is still among the largest shareholders, as are some of his family members. openDemocracy’s research indicates that in the four years up to 2017, Sunley Family Limited had a profit of £15.7 million and paid taxes of £1.2 million. This translates into a 7 percent effective tax rate.
Debate About His Lack of Knowledge
Some argue that even if Tice is not directly involved with the tax havens that control a large amount of his family business, he should know more of them. John Christensen, for example, said that company directors must know who they work with. Lack of knowledge, in this case, could lead to working with money laundering, so research is part of their due diligence.
Tice does not agree with that statement. He directly told openDemocracy that those on the board do not necessarily know the people or companies behind shareholders. He referred to the fact that shareholders can change and the lack of legal obligation.
The Future of Tice and Taxes
Tice has not kept his criticism of the EU tax policy secret in the past. Some speculate that Tice may support Brexit due to this dislike for the European Union’s tax policies. These critics indicate that Tice has shown no intention of fighting corporate tax abuse in the UK, including following Brexit.
Did you find this article useful?
Subscribe to our newsletter for more!