Alan Sugar clasps his hands

Revealed: Sugar attempted to dodge £186m tax bill

Alan Sugar tried to avoid a £186m tax bill by becoming a non-resident for tax purposes, The Bureau of Investigative Journalism and The Sunday Times can reveal.

People who do not live in the UK generally do not pay tax here, even if they are UK citizens. In becoming a non-resident, Lord Sugar could have avoided being taxed on company dividends

Sugar’s attempt to become a non-resident failed because he is a member of the House of Lords, who are automatically ineligible. TBIJ and The Sunday Times can reveal the billionaire has alleged he wasn’t warned of his ineligibility by tax advisers. In documents seen by TBIJ, it is alleged he said he would have given up his Lords seat had he known it would save him the tax bill.

The £186m bill was due on UK earnings including a vast £390m dividend paid in 2021. The dividend had been amassed over years of deals and property sales by Sugar’s business empire, made famous by the long-running BBC series The Apprentice.

After learning he could not declare himself non-resident, Sugar paid one of the largest tax bills in the country that year. There is no suggestion Sugar has broken the law in attempting to avoid or reduce the bill.

The revelations open Sugar to claims of hypocrisy. He has publicly rebuked others for not paying UK tax, while repeatedly insisting his own approach is straightforward.

He criticised tax avoidance and evasion in 2014, in comments that were widely reported at the time: “You’ve got to pay tax, it is as simple as that. I don’t want to live a life dodging taxmen. I could have put my money in tax-avoidance schemes or hedge funds, but the only hedge fund I’ve ever invested in is a Black & Decker.”

In 2017, he appeared on ITV’s Good Morning Britain and denounced businesses that moved their operations overseas to avoid tax. He said: “It is a joke really, because you’ve got some good companies here paying their way, and other companies, particularly foreign ones [...] that are taking billions of pounds of turnover in our country and paying hardly any tax.”

In reference to his personal tax affairs he added: “I’m English, I pay more tax, end of story.”

In 2018, Sugar tweeted to call a critic an idiot, insisting he “went to work and sold [stuff] and employed 1000s of people paid 100s of millions [in] tax to look after people like your dad who used the national health service.”

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In 2019, he wrote on Twitter: “You are a stupid person I don't dodge tax” alongside a photograph of £58.6m cheque payment to HMRC. There is no suggestion Sugar avoided tax at that point in time.

In 2020, Sugar again rounded on a critic: “You ignorant twat. I pay all my taxes and so do all my companies. It makes no difference where I am in the world. I am a UK citizen and a taxpayer.”

After the Financial Times reported questions over his tax residency status in July 2022 Sugar cast doubt on the integrity of the reporting, tweeting: “Why do you believe what you read in papers. Trust me I do pay all my taxes.”

Sugar may be best known for his starring role on The Apprentice, but made his wealth – estimated at £1.1bn – over decades through businesses spanning technology, property and investments.

The giant 2021 dividend from Amshold, a UK-based holding company, represents years of amassed profits and dwarfed dividends paid out in 2018 and 2019, which totalled just over £1m. Had Sugar been a non-resident, the entire dividend would have been exempt from UK tax.

Non-residency arrangements are perfectly legal but qualification is highly dependent on personal circumstances and relies on spending a minimal amount of time in the UK. It differs from “non-dom” status where someone who is usually not from the UK lives here and may not be taxed on their foreign income.

Amshold dividend

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Those who spend 183 or more days of the year in the UK are automatically considered tax residents, while those who work abroad full time and spend fewer than 91 days in the country are non-residents.

However, the usual rules don’t apply to serving members of the houses of Parliament – they are automatically UK residents and UK domiciled.

Sugar, who entered the Lords as a Labour peer in 2009 but renounced his party affiliation in 2015 and has sat as a crossbench peer since 2017, is understood to have taken a formal leave of absence in 2022.

Sugar’s spokesperson denied his leave of absence from the House of Lords was an attempt to avoid tax, instead stating Sugar was absent because of Covid-19 and took leave to avoid being automatically suspended from the House under a rule that excludes peers who do not attend for a period of six months or more. Most Covid-19 restrictions were lifted by the government by February 2022.

A statement in response to this story provided to TBIJ stated: “Lord Sugar is a UK tax resident, and he always has been. All his income has been taxed on the basis of his UK residency, and is fully paid up.” His representative otherwise refused to comment.

The revelations will add to concerns about conduct in public life that have roiled British politics in recent years, prompting the resignation of Boris Johnson and numerous other MPs.

They may also add fuel to calls for reform of the UK’s complex tax code and stricter standards for parliamentarians.

Header image: Lord Sugar. Credit: Artur Widak/NurPhoto via Getty Images and Canva

Reporter: Ed Siddons
Finance editor: Eleanor Rose
Impact Producer: Lucy Nash
TBIJ editor: Franz Wild
Production editor: Frankie Goodway
Fact checker: Alice Milliken

Our Enablers project is funded by Open Society Foundations, the Hollick Family Foundation, Sigrid Rausing Trust, the Joffe Trust and out of Bureau core funds. None of our funders have any influence over the Bureau’s editorial decisions or output.