Tax avoidance

One half of the Hargreaves Lansdown financial services empire has dubbed the entire cabinet “muppets” and said his business is one of just two in the FTSE 100 not using offshore or other tax avoidance arrangements.

Peter Hargreaves’ bold pronouncements were made in the wake of Hargreaves Lansdown announcing that its pre-tax profits leapt by a market-defying 21% to £152.8m, with its tax bill rising by 16% to £39.5m.

In an interview with the London Evening Standard, he said the Cabinet reshuffle this week was ‘just one bunch of muppets exchanged for another bunch of muppets’.

On tax issues, he said:

‘We are one of only two FTSE 100 companies which do not use offshore or other tax avoidance arrangements. In fact, we are probably one of the highest tax paying companies in the index.’

Two years ago the company brought forward its dividend payout to avoid the 50% top tax rate for the core beneficiaries — Hargreaves and co-founder Stephen Lansdown. This year, though, he will be coughing up the full 50% on his £34.4 million dividend.

The accountant, who launched the company from the spare bedroom of his Bristol flat in 1981, when Britain was ravaged by strikes, high unemployment and rioting, is about to wave goodbye to his business partner, Stephen Lansdown.

Lansdown, who recently celebrated his 60th birthday, will not to seek re-election as a director of the company and is set to step down from the board following the investment management group’s annual meeting.

Hargreaves Lansdown now employs 650 staff and is headquartered in Bristol.