Hypocrite? Chancellor's firm pays paltry tax bill as Hammond tells web giants to pay 'fair share'

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'Careless': Critics said Philip Hammond should set an example

'Careless': Critics said Philip Hammond should set an example

'Careless': Critics said Philip Hammond should set an example

Philip Hammond was facing his business affairs last night after he emerged that a private company in which he held an interest in the United States since he joined the Government.

An investigation by Hammond has just paid £ 5,964 in tax on total profits of £ 1.6million since it was set up in 2010.

That is an effective tax rate of 0.4 per cent – a long way below the standard 19 per cent corporation tax rate.

Tax experts said the company, Chiswell (Moorgate) Limited, appears to have taken advantage of the rules that they legally allow to reduce their tax bills when their profits are unpredictable.

The Mail on Sunday has established that one of the firm's directors also works as an accountant in the 'mitigating' tax.

There is no suggestion of wrongdoing by Hammond or the company itself. However, critics said the revelations were at odds with statements and has made on corporation tax.

As Chancellor, he has launched a crackdown on web giants such as Amazon and Google, which have been accused of using their own tax bills, and called them to pay their fair share to support public services.

Former Business Secretary Sir Vince Cable, leader of the Liberal Democrats, said: 'The Chancellor is without doubt a man of honesty and integrity who makes legitimate use of his experience as a successful entrepreneur.

'It is extraordinary that has been cared enough to ensure that its company is above tax dodges that others would be condemned for.'

Hammond's links with Chiswell stem from the time before he became Transport Secretary in 2010.

Hammond, 63, was a successful entrepreneur who amassed a multi-million pound fortune from his construction empire, which builds houses and care homes. Once he became a Minister, Chiswell was established as a parent company of the firms and owned or part-owned.

He has no involvement in Chiswell, but he is a beneficiary through The Hammond 2010 Discretionary Settlement Trust, which controls Chiswell.

Since it was established in 2010, the company has made an annual profit in five separate years, totalling £ 1.6million. In three of the eight years, Chiswell made annual losses. Normally, a company is expected to pay a tax in any year in which it makes a profit.

If it had paid the standard corporation tax rate on the £ 1.6million it earned in profitable years, the company would have paid the taxman around £ 300,000.

Made in small loss last year of 5,109 and is not expected to pay any tax.

Its biggest profit was in 2017, when it made £ 788.633. It did not pay any tax that year. 2015, when it passed over £ 7,567 – even though it was paid in.

However, it also received a rebate of £ 1,603 in 2011, meaning the firm's total tax bill in eight years of operation has amounted to £ 5,964.

Chiswell's main operating subsidiary is Castlemead, a company co-founded by Hammond in 1984 that took off in the early 2000s when it started building doctors' surgeries and care homes

Chiswell's main operating subsidiary is Castlemead, a company co-founded by Hammond in 1984 that took off in the early 2000s when it started building doctors' surgeries and care homes

Chiswell's main operating subsidiary is Castlemead, a company co-founded by Hammond in 1984 that took off in the early 2000s when it started building doctors' surgeries and care homes

It was unclear exactly how the company had reduced its tax bill. It they used to make a profit and use it when it makes a profit.

It is also possible to offset the loss of one of its subsidiaries against profits at another, such as the parent company.

Critics said the Chancellor should be an example of good business ethics.

A spokesman for Hammond said: 'The Chancellor has no direct interest in this company, but in response to your query, we have checked with the professional advisors to the trustees who confirm that all tax returns are required in respect of Chiswell (Moorgate) Limited and its subsidiary companies have been made and all tax has been paid. '

Chiswell's main operating subsidiary is Castlemead, a Wrexham-based company co-founded by Hammond in 1984.

It started out as a housebuilder, but it took off in the early 2000s when it started building doctors' surgeries and care homes. Castlemead Group Limited is 65 per cent owned by Castlemead Limited, which is in turn wholly owned by Chiswell. Hammond previously extracted millions of pounds from his construction empire.

Between 2003 and 2010, Hammond and his wife Susan received dividends worth £ 3.75million from Castlemead

Between 2003 and 2010, Hammond and his wife Susan received dividends worth £ 3.75million from Castlemead

Between 2003 and 2010, Hammond and his wife Susan received dividends worth £ 3.75million from Castlemead

Between 2003 and 2010, he and his wife Susan received dividends worth £ 3.75million from Castlemead. At its peak in 2007, before the financial crisis struck, they cashed in £ 1.75million.

Richard Murphy, of campaigners Tax Research UK, said the complex nature of Hammond's business empire meant it was not possible to put an exact figure on its tax payments.

It's one of the absolutely fundamental failings of the UK company accounts. We do not know, "Murphy said. Why is it that we can not be given the tax affair of companies where we have a reasonable right to know? This is wrong. '

Simon Linley, a director of Chiswell and a nominee for Hammond's trust, declined to comment. He is an accountant at Tunbridge Wells-based Creaseys, which counts Hammond's company as a client. It said it did not comment on clients.

On Creaseys' website, Linley says he is a tax specialist who gives advice on the "mitigating capital gains tax and inheritance tax". Another nominee for the Hammond trust is his friend Lord Moynihan, the former Sports Minister.

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