Nigel Farage, the leader of Reform UK, is facing questions over his personal tax arrangements, which see him use a private company to reduce his tax bill on earnings from GB News and other ventures, even as his party pledges to scrap VAT and green levies on household energy bills to save families an estimated £200 a year.

Farage's Private Company and Tax Bill

Mr Farage, who serves as the Member of Parliament for Clacton and draws an annual MP's salary of £94,000, channels his earnings from his prime-time GB News show and other external work into a private company. This arrangement allows him to pay corporation tax at 25% on his profits, a bigly lower rate than the 40% income tax that would typically apply to higher earners.

His company, Thorn in the Side Ltd, of which he is the sole director and shareholder, also enables him to offset various expenses against its profits. The parliamentary register of interests reveals that Mr Farage has earned nearly £400,000 from GB News since August 2024 for approximately 190 hours of work, equating to over £2,000 per hour. All these payments are directed to his company.

Beyond his GB News commitments, the Reform leader also holds roles as a brand ambassador for gold bullion firms, engages in the international speaking circuit, and writes a column for The Daily Telegraph. Latest accounts show Thorn in the Side Ltd held £1.7 million in cash as of 31 May 2024, a rise of over £1 million in a single year, and also owns two investment properties.

The company's value has soared to £2.6 million, up £2 million since 2021, reflecting Mr Farage's increasing public profile.

Mastheads

Personal service companies aren't illegal, but they've faced criticism from across the political spectrum for helping people cut their tax bills. The BBC, ITV, and Channel 4 have all cracked down on the practice in recent years. HMRC's repeatedly tightened the rules around off-payroll working—IR35—to stop this kind of tax avoidance.

Mr Farage has previously criticised those who seek to avoid tax, labelling them the “common enemy.” Yet, he has also stated that some forms of legal tax avoidance are acceptable, arguing in 2014 that “nobody voluntarily paid anything to HMRC” while defending reducing a tax bill within the law. Last year he claimed to have 'bought a house' in his constituency, but it's actually registered in his partner's name—so he legally sidestepped the higher stamp duty rate on a second home since he already owns other properties.

He's also refused to publish his tax returns for 2023/24. Interestingly, he offered a relatively mild response to Deputy Prime Minister Angela Rayner's tax affairs earlier this summer, initially saying “jolly good luck to her.” However, after it emerged she had underpaid stamp duty on a seaside flat, his stance hardened, stating: “I don’t see how she can survive this.”

Reform UK's Promise to Cut Energy Bills

At the same time, Reform UK has unveiled a key policy pledge: to scrap VAT and green levies on household energy bills should the party come to power. The party estimates this measure would save the average family £200 annually, a big sum amid ongoing concerns about the cost of living.

The pledge comes as energy costs are back in the spotlight, mainly because of the conflict in Iran. There's real worry that if oil prices keep climbing—thanks to Iranian forces attacking ships in the Strait of Hormuz—UK household bills could spike. The Strait of Hormuz handles most of the world's oil and gas shipments, so when it gets disrupted, oil prices shoot up—they've already hit more than $100 a barrel.

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Nigel Farage is scheduled to appear at Reform UK's party conference on Friday, where he is expected to further elaborate on the party's policy proposals and vision for addressing the cost of living crisis.

This article was created with AI assistance.