By Lois Rogers and Jon Ungoed-Thomas
GEORGE OSBORNE has shared in a £335,000 dividend payout from his family’s profitable wallpaper business — even though it has not paid any UK corporation tax for the past seven years.
A Sunday Times analysis of the accounts of the parent company of the family business, Osborne & Little Group Ltd, reveals that it paid dividends to shareholders including the chancellor for the first time in the year to March 2015.
The company has not paid any UK corporation tax since 2008 partly because it has rolled over losses from previous years and has deferred tax payments.
The disclosure of the payment of the dividends despite avoiding corporation tax is embarrassing for the chancellor. He made a crackdown on “morally repugnant” tax avoidance a key part of his 2012 budget speech. His most recent claim that a £130m tax settlement with Google had been a “major success” backfired after it emerged that it amounted to an effective tax rate of about 3% compared with the corporation tax rate of 20%.
The Sunday Times has also highlighted a number of high-profile companies — from the owners of Cadbury to the Queen’s jewellers as well as six of Britain’s 10 biggest companies — which have paid little or no corporation tax despite global profits worth billions of pounds.
Sir Peter Osborne, the chancellor’s father, founded the company with his brother-in-law Antony Little in the 1960s offering handprinted wallpaper. Company records show that the chancellor now holds 6,833 shares in the family firm — less than 1% of the total shares — and the latest accounts show he was awarded a dividend of 18p a share, worth £1,230. His father and mother Felicity shared dividend payouts of more than £270,000.
The interior design group, which has its head office in London and has 195 employees, made profits in the year to March 2015 of £722,200 on revenues of £34m. No UK corporation tax was paid. The latest accounts show overseas tax of £6,000 and a deferred tax charge of £173,000.
The tax bill has partly been reduced because of losses over previous years. The dividends were awarded on May 30, 2014. Osborne’s stake in the firm — which pays its senior director £684,000 a year — has been subject to scrutiny since he disclosed he was the beneficiary of a family trust that held more than 15% of the share capital of Osborne & Little. Such trusts offer advantages for inheritance tax planning on family businesses.
Osborne’s parliamentary register of interests was amended in 2010, removing reference to the trust, and now states that he has shares valued at more than £70,000. His father is the 17th baronet of Ballentaylor and Ballylemon in Ireland. As the eldest son, the chancellor will inherit this title.
The family business has helped to fund an affluent lifestyle for the Osborne family. It was reported in 2010 that Sir Peter Osborne had helped his son, Adam, to buy a £1m house after he was barred from working as a doctor for six months because of writing fraudulent prescriptions. Adam Osborne was struck off the medical register last week after having a two-year affair with a vulnerable patient.
A spokesman for the chancellor said: “All of the chancellor’s interests are declared properly and in accordance with the rules.” Osborne & Little did not respond to a request for comment.
Additional reporting: Andrew Bousfield