207. What Can We Learn About Farage’s Finances From His Accounts?

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1:26for example this offshore trust that was set up in the early 2000s this was the in the isle of man wasn't it the farage family educational trust we should pause to say that

1:36Dan Neidle:okay he admitted it was a mistake but it was a step which is possibly the most aggressive piece of tax planning i've seen from a politician in the uk

1:55Hello and welcome to The Rest is Money with me, Robert Peston. And me, Steph McGovern. Now, we're delighted again to be joined by Dan Needle, our house-trained tax expert. Barely house-trained. One of our absolute favourite guests. And we had you on very recently, but we really wanted you back this week because there has been so much focus on the tax affairs of our leading politicians. It was only a few days ago that the deputy or the then deputy prime minister, Angela Rayner, was forced to resign because the ethics advisor discovered that she hadn't taken advice from her legal advisors to get specialist tax advice on what rate of stamp duty she should pay.

2:47that has then created an awful lot of interest in the tax affairs of our other leaders and in particular the tax affairs of Nigel Farage who obviously very critical of this government very critical of Angela Rayner the leaders of our parties have in recent years sort of got into the habit of publishing their tax returns. Keir Starmer has, Rishi Sunak did before the last election when he was Prime Minister. Except they didn't. Yeah, well, let's come back to that. I think there is a big issue around what they published and whether it is genuinely what we need to know. And I want to come back to that.

3:28But I thought we should start with Farage. He has not committed to publish anything additional from what he files at Companies House and what he puts in the members register of the House of Commons. You've had a look at what he files at Companies House. And really what we wanted to start this discussion looking at was what do you think we can glean about Nigel Farage's personal finances from what he's filed at Companies House and what he's filed in Parliament?

3:58Dan Neidle:Sure. And of course, none of that is going to tell us anything about his arrangements for buying a house with his partner, because individuals don't file accounts. All we can see are the companies. Totally right. And I suppose if you want to, since there has been a lot of focus, you know, headlines in the Daily Mirror about the fact that his house in Clacton was bought by his partner. He didn't pay the stamp duty. She paid the stamp duty. She presumably paid the lower rate of stamp duty. The Daily Mirror is calling him a hypocrite for attacking Angela Rayner, accusing him of somehow playing fast and loose.

4:33I actually asked him about this actually when I interviewed him the other day, and he just said it was rubbish, this attack on him. But what do you think?

4:39Dan Neidle:So I'll do the boring lawyer thing and say it depends on exactly what happens. It depends on the facts. So let's think about the different possibilities. The whole thing blew up because in the autumn of last year, Farage was asked why he doesn't spend time in his constituency. And he said that he, he used the word I, had just exchanged on a house. when it turned out i think in may this year that had been his partner who had actually made the who made the purchase it's her name on the property at which point the mirror is jumping to the conclusion aha this shows that he avoided tax because if he'd bought a house he owns property already there would have been higher rate stamp duty it's another five percent but the fact she bought but there wasn't saving them about 44 000 pounds that's the basic attack but whether this is tax avoidance really depends on what happened let's think about several scenarios one scenario is that she bought it herself from her own resources yeah it was a joint decision to buy in clacton as most partners do with financial decisions they discussed them he wanted to move to clacton she wanted a house she had the resources she bought it in that case it was not tax avoidance at all.

5:53Dan Neidle:It's simply her buying a house. And if they've been married, married couples only get one house between them in this stupid and rather paternalistic set of rules we have to deal with. So if I already own a house and my wife buys one, higher rate applies. Because they're not married, they each get a house without higher rate. And her deciding to buy a house doesn't trigger higher rate, not avoidance. Now, some people have said, aha, but she was just a waitress, they say rather rather patronising me. How could she afford a£900 ,000 house? And he's made some remarks suggesting her family is wealthy.

6:27Dan Neidle:We've actually looked into that. And I don't want to really go into the detail because I don't think it's fair to a private individual to delve much more of them to say that there is some evidence that a family is indeed at least reasonably wealthy. So it's not implausible she could afford that house. You also want to make sure you've got a house of your own in case you split up too. And you don't have that whole complication of trying to divide everything. So in a way, that makes total economic sense for you to do that. But obviously, there's a lot of speculation about the real reason for it.

6:59Dan Neidle:You need to go home in Clacton. You're a 40-something person of means who doesn't currently own property. It's by no means crazy to then decide that you want to buy the Clacton property. So this does not seem implausible to me. Now, we then get into scenarios where Mr. Farage is lying, because he said very clearly that he didn't give her the money, he didn't loan her the money. If he is lying and he gave her the money, then people might well regard that as tax avoidance, depending on how he did it. It might be failed avoidance. You could actually end up with the higher rate charge anyway. But we shouldn't really accuse people of lying on the basis of no evidence.

7:33Dan Neidle:And there's really no reason to think that he's lying other than the fact that he initially said, I'd exchange, but I see that as just a convenient political slip, perhaps slightly naughty of him at the time. implying that that means he's lying now I think is a little bit stretching it. So what about though if we look at other things that Nigel Farage has done in the past in terms of what looks like tax avoidance you can tell us whether it is or it isn't but for example this offshore trust that was set up in the early 2000s this was the in the Isle of Man wasn't it the Farage Family Educational Trust.

8:10Dan Neidle:So this is a company called Farage Limited which I think was a family investment company. Nigel Farage's brother, Andrew, had halved the shares when the company was founded in 2003. The other half were not held by Nigel Farage, they were held by this trust. And it continued holding it all the way through to 2011 when it gave the shares to Andrew. The company then collapsed rather disastrously with something like a hundred grand owed to HMRC. Andrew Farage was found to have received an unlawful dividend. Don't really know how that result, but a huge mess. But it comes back to why did Nigel Farage hold it through an Isle of Man Trust?

8:48Dan Neidle:And that is unusual structuring. I'm not some shrinking naive. I was a tax lawyer in the city for 25 years. I've seen all kinds of structures. But for a UK individual, sort of an Isle of Man Trust is unusual. There's absolute tax avoidance. It's also quite aggressive tax avoidance. It's not entirely clear why someone would have done that. Possibly it was a capital gains play. Possibly he was planning to maybe leave the country at some point and take a capital gain if the company was successful. We can't know. But we should pause to say that, okay, he admitted it was a mistake. But it was a step which is possibly the most aggressive piece of tax planning I've seen from a politician in the UK.

9:30What do we glean from that in respect of Nigel Farage's attitude to tax?

9:37Dan Neidle:So lots of people have different attitudes to tax. And most people will do something that saves a bit of tax, but won't do anything very complicated, not least because they can't afford to. On the other hand, the very largest companies tend these days, at any rate, to have an extremely cautious attitude to tax and don't want to do anything that creates risk. So the people at the edge tend to be small business people. They regard it more as their money. They don't have risk committees to hold them back. And even now, they will still do things that are quite aggressive. And I think we should see Mr.

10:08Dan Neidle:Farage through that lens. And that perhaps explains why he set up a rather dodgy-looking trust in the early 2000s. Would he do the same now that he's not primarily a businessman, that he has an obvious political profile? Perhaps not, but that's just speculation. But the point must be right, that we need to be a little bit more sceptical than we would be, say, of Keir Starmer's tax affairs simply because of this history. So we've moved on from the offshore trust. Where are we going next with Nigel Farage's interesting money making and tax pay? We're going to gin. We're going to Brexit gin, which is a gripping episode.

10:49Tell us about whether Brexit gin was a money spinner.

10:52Dan Neidle:So for anyone who unaccountably missed the news in 2022, Nigel Farage launched some gin, which he said was what was called Farage gin. it was the, gotta you do scare quotes, taste of Brexit. It came in three colours, red gin, white gin and blue gin. Yeah, of course. He was going to send a bottle to his apparent friend, Jean-Claude Juncker and to Donald Trump, who doesn't drink. There was a launch and these were actual bottles actually sold. And one of our teams saw a photo of one and there was something interesting about it because in this photo was the name of a company the company that makes the gym.

11:32Dan Neidle:That company was called Baxter Laois Limited. Laois spelt L-A-O-I-S. And this is a company owned by Mr. Farage's partner that she set up in 2015 as a consultancy company, which seems to have had very little going on, just a few thousand pounds, then kind of did nothing for a few years before 2022. And then in 2022, clearly it took over this gym business it seems to have lost about 16 000 pounds and then that's it and then in august his partner applied to strike the company off from company's house but then changed her mind about a month later if this company was the company behind the gym which the label suggests and the gym was not a successful venture and not a large venture so it didn't do very well then i mean how many bottles are we talking that they sold so there's this game we have to play with small companies where you ask me a question about them and I say I don't know because the way small companies are currently allowed to account there's very little detail public we can see their balance sheet we can sometimes infer what their annual profit was we can't be certain about it we don't know the turnover so that 16 000 loss did they sell a million bottles but lose money did they sell no bottles at all and lose money don't know all we can say is they lost about 16 000 pounds So where do the Farage-related accounts go from there?

12:53Dan Neidle:So then we get to the main course of this, which is Thorn in the Side Limited. This is the company that Mr. Farage's media income goes through. So now we're talking about quite serious money. there was a little fuss a couple of weeks ago that farage was avoiding tax because when he's paid by gb news for the show he does with him which i think is about for 400 000 pounds last year they don't pay him individually they pay to this company and quite a lot of people went aha he's avoiding tax but it's not quite so simple we can get to that in a bit we can look at the company and we can have an idea of how it's doing.

13:36Dan Neidle:These are kind of estimates because it's a small company, it doesn't give us much disclosure. But we can see that the company made profits of about £350 ,000 in 2023 and about£1.6 million in 2024. So by the standards of a UK politician, Nigel Farage is a very wealthy man. If you look at his filings to Parliament, the register of interest, he does have a very significant stream of commercial earnings. And actually, it's worth just making a contrast here. If you look at, for example, Kemi Badenoch's filings, she has very substantial political donations registered, but zero absolutely she has literally zero commercial earnings whereas nigel farosh has you mentioned gb news where he is you know regularly filing 30 000 40 000 in in monthly income from from gb news for his television program so he's a brand ambassador for example for a bullion, a gold broker called Direct Bullion.

14:49And so, for example, for four hours work, he received the money anyway on the 6th of January 2025. For four hours work from Direct Bullion, he got£91 ,200. And this is for doing sort of online promos for this bullion business. As I understand it, they think he helps sort of somehow bolster their image or bolster the image of buying gold. There is a sort of tax angle here as well, because if apparently you buy what are called Britannia coins or gold coins created by Royal Mint, there is no capital gains tax to pay or indeed VAT to pay if you buy your gold in that form. And I think, as I understand it, this firm does sell gold in that form.

15:43Yeah. And Robert, you mentioned that 91 grand he got in January 2025. Only a month before that, he got double that. He got 189 grand from them in December 2024. So this is a lot of money. How many hours work was the 189 ,000? I think it's four hours per month. That's quite an hourly rate. It is.

16:03Dan Neidle:It's also a product that I would suggest people should stay clear of. so um i'm a tax liar i was always talking to people about tax but one thing pretty much all tax advisors will tell you is don't do something just because of tax because then you can end up making a decision which looks great from a tax perspective but is bad from another perspective and gold bullion is a classic example of that that people see the gold price go up they think aha here's a way to invest in gold and not pay capital gains tax yeah but you're not investing in the kind of gold that's easy to trade. You're investing in coins that are, there isn't a liquid market.

16:37Dan Neidle:And you may well find that even if the price of gold goes up, you can't realise that. And so the gain that you're trying to get tax-free may end up not being a gain at all. So I would suggest people think very carefully before being led by the apparent tax benefit on this. Can I ask about the way he uses this thorn in the side for his media appearances? Because that's quite common there are lots of people who do that who put their their income from um media stuff and corporate work and things like that freelancers through a private company and then you know this means you're paying the 25 tax and not the 45 personal income tax and that's not um that's not illegal you can do that loads of people do that but where it where there's a problem is with something like gb news where you know we understand he gets about 400 grand a year from there.

17:28There is the IR35 potential issue here, isn't there, which is this tax legislation to stop what's known as disguised employment. So where you're paying less tax and national insurance because you've been paid through a private company. And there's been loads of really high profile disputes around this, haven't there? Like Lorraine had this dispute with the court and said when she does Lorraine she's playing the part of Lorraine and she isn't actually Lorraine so therefore you know those rules yeah don't stand on a half of that but um but but is there a chance that that might be where he's avoiding tax there through if you look at something like GB News so

18:09Dan Neidle:there's several levels to this let's start out let's start with me as an example so um the thousand pound fee that you're not paying me for this but my let's let's say you pay me a thousand for this. If you pay that to me personally, I'm going to be taxed to that. And if I'm a top rate taxpayer, I'll be paying 45 % tax on that. What if alternatively, I set up a company and you pay my company? Well, the company will pay corporation tax at 25%. And I say, aha, well, that's a great deal. You're paying 25 % instead of 45%. But hang on, the company's got the money. If I want the money. I have to get it out of the company.

18:50Dan Neidle:And if the company pays me a dividend, when I receive the dividend, I'm going to be taxed at 39.35%. So I end up with an overall higher level of tax than if I just received the money directly. So in that scenario, I lose out if I use your company. But I'm going to say but a lot of times, but I don't have to pay the money out to me. What if I use the money to make investments that's pretty good then because eventually I may take a dividend from the company years away but for now I'm saving tax and saving tax now is a pretty good result so even in that simple case I might get a tax benefit by using a company is that tax avoidance everyone can decide but it's perfectly legal as they say and there's no rules that stop it And is that Farage's thorn in the side?

19:44I mean, it may be that this is not visible from the fairly basic accounts they file. But is there any sign that Farage's thorn in the side is using the cash that comes in to make investments that stay within thorn in the side?

20:01Dan Neidle:So it looks like of the significant amounts the company has made in the last few years, about£350 ,000 have paid out in dividends in 2023. Most of the rest was used to buy an investment property worth about£1.25 million. We don't know what that is, but I'm guessing some kind of real estate somewhere in the world. So the simple case is where you guys pay me and I put it through a company and that's fine. But let's imagine that we do this podcast every week and you pay me£1 ,000 every time. at that point HMRC might well say hang on you're really an employee you're avoiding tax here and to decide whether and I'm an employee they'd look at things like does it have to be me turning up could I get someone else to go instead of me do I decide the hours or do you decide the hours who decides kind of what I'm saying what we're covering is that me or is that you and there's a bunch of rules that say whether these rules could IR35 apply if they do apply that even though the money's paid to a company, it's taxed as if I was an employee.

21:02Dan Neidle:And here's the kicker. It's not me that gets to make that decision. It's you when you hire me. So if you get it wrong, you're going to have a bad time with HMRC. If you prudently decide to apply IR35, then I get less money, but your life is easier. So most businesses will apply these rules quite cautiously. And I think there are signs that that's happening with GB News and Farage, that they are actually applying IR35. And even though the money's going to a company, they're paying him as if he's an employee. And there's signs of that in the accounts. And what are those signs? So those signs are that we can look at how much money's coming in, broadly.

21:44Dan Neidle:We can look at how much tax it pays, corporation tax. And there's a lack of corporation tax of about£350 ,000 in 2023. And yeah, that could be some evil tax avoidance scheme. But I think probably more likely it's because that's the money he got paid by GB News that year. And it's paid under IR35. So he's taxed personally on it. And the company doesn't pay tax on it. So this is an educated guess. But the and I'm not an IR35 specialist, but I've spoken to people who are, and they think that if if GB News behave like a normal prudent business, this is what they do. So that's not avoidance. That would be the exact opposite of avoidance.

22:26Dan Neidle:Having the company is doing nothing in that scenario. These things are slightly gripping. I mean, maybe in a slightly voyeuristic sense, I admit. But, you know, looking at the members register relating to him, it is astonishing how much money he makes from doing these little personal messages for Cameo. notoriously, Nigel Farage on one occasion shouted up the rah to somebody in Ireland who had requested a message from him, apparently not realising he was supporting the IRA by saying this. But anyway, I mean, he's, you know, so for example, again, on January the 7th of this year, he gets 27 ,000 quid for a month's, you know, for 28 hours work recording these messages for Cameo.

23:14And I mean, I mean, the payments from Cameo are extraordinary. 9 ,000, 9 ,000, 17 ,000, 17 ,000, 27 ,000, 15 ,000, 9 ,000, 12 ,000. These are just in the months since he's become an ME. This is sort of amazing, isn't it, that people are prepared to pay so much money for a personal message from Faraj? But it shows his popularity, doesn't it? That's the thing here. This is members of the public paying to get messages from him, likely people who would then go and vote for him. I mean, I won't disclose who, but there is no... I had a sitting next to a very, very, very well-known National Treasure actor a couple of days ago, and I was slightly intrigued that this person volunteered how much they loved Farage.

24:10As I say, I'm not going to embarrass this person by revealing a private conversation, But there's no question that Farage reaches extraordinary numbers of people. And right now, partly, I think, because of just massive disillusionment with Labour and Tories, the number of people who say to me, oh, of course, they're a bit flaky reform. But, you know, I hate the others so much. I just I'm going to risk everything being broken. That's why I'm backing them. So coming back to, Dan, to the tax affairs then and the kind of the question here about we know Nigel Farage doesn't publish personal tax returns.

24:47Should he? I mean, should we know what's going on? Does it matter if there's avoidance being used? It looks as though he's earning, I don't know, eight, nine hundred thousand pounds a year. And if he were paying 45 percent tax, if that was pure income, then, you know, you ought to be paying somewhere between three and four hundred, three hundred thousand and four hundred thousand pounds to the tax man a year. If he isn't because he's, you know, channeling stuff through companies and finding ways to get his tax bill down, should we care about that? Is that something voters should be critical of and worry about?

25:33Dan Neidle:I mean, it's a really good question. So let's park the GB News thing where there's a question as to exactly how it's treated. Let's look at, say, his speaker fees. He is 100 % within his rights to put them through a company. There is no rule stopping that. As a tax lawyer, I would say it is not tax avoidance because Parliament clearly anticipates it and is cool with it. I suspect quite a lot of normal people who aren't tax lawyers, or normal people as they're called, would disagree and say that in choosing to do it this way and pay less tax, he is avoiding tax. That's a pure political question.