Interestingly, someone else is starting to call out Julian Richer on his tax arrangements over the sale of his business. You know, the sale in which he paid no capital gains tax, no income tax and apparently, if I’ve read this right, doesn’t even generate an asset to be included in his estate and so free of inheritance tax as well.
The hi-fi entrepreneur Julian Richer has hit back at critics accusing him of laughable hypocrisy for signing a Davos letter calling on millionaires to pay higher tax after he received tax breaks for handing control of his company to staff.
Miles Dean, head of international tax at Andersen Tax UK, had said it was hypocritical for Mr Richer to sign the Millionaires Against Pitchforks letter last month along with former Unilever boss Paul Polman, Innocent Smoothies co-founder Richard Reed and US real estate developer Jeff Gural.
Last year, Mr Richer sold 60pc of his shares in the electronics retailer he founded in 1978 to an employee-owned trust for an initial payment of £9.2m. He did not have to pay capital gains tax on the sale due to an exemption in the Finance Act 2014.
Well, yes, as we’ve pointed out before this insistence on absolutely no tax avoidance does sit uneasily with the manner in which Richer was taxed upon the sale of his business. That is, absolutely and entirely legally structured, the end result of which was no tax.
Richer’s counterclaim is:
Of the money he received for the shares he sold, he gave £3.9m back to staff in payouts of £1,000 for each year worked in one of his stores – more than twice what he would have paid in capital gains tax.
Ah, no, not really. For that first payment is indeed just the first payment. If I recall correctly it’s the first in a series of 15 to be paid over the next, umm, 14 by now years. All of which will be tax free of course. And we’ve not as yet heard that further such payments are going to be made to the staff from it.
What’s much more fun here is that there’s a certain amount of squirming elsewhere about the point:
Andrew James says:
February 10 2020 at 3:37 pm
Will you be commenting on this? Is this another tax relief that should be scrapped?
Richard Murphy says:
February 10 2020 at 4:22 pm
I do not have a Telegraph account and so have no way of knowing what that is about
Richard Murphy says:
February 10 2020 at 6:42 pm
If you think Worstall is right then the answer is you need to get a life
Fingers in ears and sing Lalalala. Always a useful reaction to embarrassment.