The Brexit Party Ltd: Nigel Farage’s Track Record on Limited Companies and Unlawful Dividends
With his previous history on limited companies, Nigel Farage’s directorship of the Brexit Party needs some scrutiny.
An awful lot has been made of the fact that the Brexit Party is not a political party, but a limited liability company. Unfortunately, no one has investigated further than asking its leader, who said he was “too busy” with undisclosed diary meetings with undisclosed strategists to spend time discussing undisclosed donations.
So, what is the benefit of Nigel Farage establishing a limited liability company instead of a political party? And what is his record of working with and defending limited companies?
Limited liability company filing rules allow the Brexit Party to trade past the date of the General Election and not file its accounts (dated back to 31 December 2019) until August 2020. It won’t have to declare its ‘persons of significant control’ until 21 February next year and that won’t be available for public scrutiny until 6 March 2020.
When it does publish this information, it will do so as either a ‘small company’ or a ‘micro-entity’.
The rules for these filings are as below:
I could find no confirmation as to whether or not the potentially millions of pounds in donations and payments received by the Brexit Party are being included as ‘income’ for ‘The Brexit Party Limited’. Short of someone leaking the non-disclosure agreements signed with the party regarding candidacy, we won’t get to know until August 2020.
Back in May 2014, Nigel Farage suffered a far-ranging humiliation at the hands of LBC’s James O’Brien as they discussed his involvement in a company – FARAGE LIMITED, company number: 04659240 – which attempted to wind itself down, owing thousands.
“We have a responsibility to pay our tax bill, and it is being paid,” Farage told said. “Actually, it’s being paid out of earned income and the inland revenue is getting twice the money out of it,” he claimed.
It now seems clear that those statements were inaccurate. The company never traded again.
Five years on, we can really get into the granularity of what happened at Farage Limited. Farage’s resignation came during the last year of trading; meaning that he was an officer during the period which felled this company.
Let’s try to get a snapshot from the final meeting. First page:
Unlawful dividends occur when dividends are drawn down by shareholders without sufficient profits being available. Farage’s brother Andrew, a commodities broker, was investigated by the liquidator for an alleged unlawful dividend of £124,337.
What of the creditors?
Think losing £100 for a Brexit seat was bad? Take a look at the people who were owed money by Farage Limited at the time Nigel Farage was Secretary. A large part of this debt was a tax bill:
It’s important to understand that there is nothing illegal here. And that’s the key point – because it could allow Farage to engage in exactly the same type of activity with The Brexit Party Limited.
It also confirms that Farage misled the public on LBC in 2014 regarding earned income and payments to the HM Revenue and Customs.
What does that mean we can expect from the Brexit Party in 2020?
There would be nothing illegal in not publishing filings and winding up. Once the General Election is over, the Brexit Party will serve no purpose. We may never know if it is counting ‘donations’ as ‘income’ or what it is paying directors. Or, ultimately, what happened to the money that 351 candidates gave to Nigel Farage.
This is how a ‘political party’ in the UK must file:
Parties don’t have to report loans to the elections watchdog, the Electoral Commission, which is staggering given the questions around loans provided to Leave.EU from Arron Banks.
Due diligence requires the Brexit Party to provide almost live reporting on donations, to establish who the donor is, with audited accounts and the rest.
These are the obligations of political parties to ensure that corruption in political funding is mitigated, but they require extensive party apparatus to abide by.
However, when it comes to a limited liability company like the Brexit Party, how much skin is there in the game for Nigel Farage? According to his SH01 filing from 16 September this year, the maximum liability the Brexit Party has for its unsecured creditors is £10.