Reform UK has launched an investigation into whether it underpaid VAT on thousands of pounds of ticket sales and merchandise.
Nigel Farage’s party, which is leading in the public opinion polls, said it was reviewing its tax affairs after a Times investigation alleged it may have breached the law and could face a fine from HM Revenue and Customs (HMRC).
Political parties are “likely to qualify” for an exemption from VAT, including on membership fees and donations, according to HMRC. However, they are required to pay the tax on certain activities such as ticket and merchandise sales over the value of £90,000.
Reform is understood to have exceeded the threshold last autumn due to ticket sales for its well-attended party conference in Birmingham, according to the Times. Filings by the party published in August showed that it made £438,296 from “merchandise sales and events” last year.
A spokesperson for the party said: “We are currently in the process of fully reviewing our position in respect of VAT with the assistance of our appointed specialist VAT advisers.”
There is no suggestion the party deliberately attempted to evade VAT.
Reform has ramped up sales of tickets for events and merchandise amid its ballooning popularity among voters, including branded mugs, water bottles and football shirts with “Farage 10” emblazoned on the back.
Earlier this year the party welcomed thousands of attenders to its annual conference in Birmingham, as Farage attempted to present Reform as a prospective government in waiting.
The event at the National Exhibition Centre included “hundreds” of businesses – attenders included JCB and TikTok, while the operator of Heathrow airport was among its sponsors.
Documents reviewed by the Times showed that Reform did not charge VAT until April for tickets to its national conference or subsequent events. A note in the party’s 2021 accounts suggested it did not understand it had to register for the tax, stating that “as a political party, the party cannot be registered for VAT”.
The Times said Reform had started adding a VAT charge to some products after being approached by the newspaper at the end of April with questions over whether the party had failed to register for the tax.
A spokesperson told the paper that Reform would settle any tax liabilities with HMRC “promptly and without reservation”. They said the party was “engaging with the relevant authorities to ensure all matters are addressed appropriately”.
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