Nigel Farage, the leader of the UK Independence Party (Ukip), has been using a private company to reduce his tax bill on earnings from media appearances and lecture fees, according to reports. The company, Thorn In The Side Ltd, allows him to pay corporation tax at 20% instead of the higher 40% income tax rate.
In the 2012-13 financial year, Thorn In The Side Ltd reported profits of £45,488. If declared as personal income, Farage would have faced a tax bill of £21,883.03, including national insurance. However, by routing the money through the company, he paid only £9,097.60 in corporation tax, plus taxes on dividends.
Farage has previously described tax avoiders as the 'common enemy', leading to accusations of hypocrisy. The use of personal service companies is legal but has been criticised across the political spectrum as a means to reduce tax liabilities. Farage also earns £78,000 a year as a Member of the European Parliament and employs his wife Kirsten on a salary of up to £20,000, paid by taxpayers.
The details emerged ahead of a live TV debate with Liberal Democrat leader Nick Clegg. Last year, Farage was branded a hypocrite after admitting to opening an offshore trust fund on the Isle of Man for inheritance purposes, though he later claimed he never used it and called it a mistake. Ukip did not respond to requests for comment.
