Peter Hargreaves is such a joy to interview. He has views and opinions on everything and is not shy to express them.
“It’s just one bunch of muppets exchanged for another bunch of muppets,” he said of the Cabinet reshuffle this week. And the stuff he told me about Jon Maguire, who ran bust investment firm Arch Cru, is unprintable in a family newspaper. But Hargreaves, pictured, then came up with a claim for Hargreaves Lansdown, his financial services company, that saw even my bearded jaw drop.
“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,” he said.
In the year just ended, Hargreaves Lansdown’s pre-tax profit rose 21% to £152.8 million, and its tax bill increased 16% to £39.5 million. That’s an effective tax rate of 25.9%, down from 27% and yet still above the current 24% corporation tax level.
“It’s our policy to pay the right amount of tax at the right time,” stated Hargreaves. Not that he particularly likes paying tax. Two years ago, Hargreaves Lansdown was the first company to bring forward its dividend payout in order to avoid the 50% top tax rate for the main beneficiaries — Hargreaves and his co-founder Stephen Lansdown. This time, Hargreaves will pay the full 50% on his £34.4 million dividend.
“I expect you’ll accuse me of artificially depressing the payout this time,” he jokes.
