British asylum hotel tycoon accused of paying £16,000,000 to ‘offshore company’
A businessman behind a company that provides asylum hotels has been accused of paying millions of pounds into an apparent offshore company.
An analysis of financial records for Clearpsrings Management Limited has uncovered £16million worth of payments to ‘Bespoke Strategy Solutions Ltd’.
The ‘consultancy’ firm is partly owned by Clearsprings’ founder and director Graham King, an entrepreneur from Canvey Island in Essex.
Clearsprings is a major Home Office contractor, paid £3,500,000 a day to accommodate arrivals in the UK and recently won a decade-long contract.
Yet Bespoke Strategy Solutions Ltd is not listed on Company House, a database that all companies in the UK must register with, or global business lists.
Tax experts could also not locate the company, an investigation by Metro.co.uk and Liberty Investigates found.
Clearsprings repeatedly declined or ignored requests to explain where the firm is registered or what consultancy service it provides.
Payments to Bespoke Strategy Solutions, also named BSS Ltd in documents, may reduce the Home Office contractor’s UK tax burden by lowering pre-tax profits.
Clearsprings’ books describe the payments to Bespoke Strategy Systems as ‘administrative expenses in respect of consultancy services’.
A separate analysis of Clearsprings’ accounts shows that King – who has a 97% stake in the firm – recently cashed out £70,500,000 in personal earnings from the company as profits swelled and the growing asylum claims backlog.
King, 57, founded Clearsprings in 1999. He made 221st on the Sunday Times Rich List this year, having amassed a £750,000,000 fortune from ‘holiday parks, inheritance and housing asylum seekers for the government’.
Most of Clearsprings’ £1,300,000,000 annual turnover is from Home Office contracts. It was awarded its latest deals in 2019, in a deal anticipated at the time to be worth £1,000,000,000 over 10 years.
Records show King extracted £23,500,000 in March 20222 and £47,000,000 in November 2022 via a share buyback, in which companies legally use their cash to buy their own shares. This mechanism can be used to redistribute excess profits and have potential tax advantages compared to dividend payouts.
It is not known if Clearsprings or King benefitted from these, although there is no suggestion of illegality.
Clearsprings stopped declaring the identity of its highest-paid director in 2009. However, accounts show King earned £1,600,000 between 2004 and 2008.
In 2015, the tycoon’s salary was £960,000. He has also earned £1,100,000 in dividends from the firm since 2010, including a £680,000 payout in 2015.
HMRC has been urged to investigate the payments.
Green Party peer Natalie Bennett said King was a ‘casebook example’ of privatisation allowing public money to be ‘siphoned off into private profit’.
Labour’s Dame Margaret Hodge, the former chair of the Public Accounts Committee, which oversees government expenditure, said all firms ‘which benefit from lucrative government contracts’ must be held to the highest standards of probity’.
‘Any unusual payments,’ she added, must be ‘investigated thoroughly’.
Mike Lewis, an associate at the Center for International Corporate Tax Accountability and Research, described the lack of transparency around the payments as ‘highly unusual’.
Alex Cobham, chief executive of the Tax Justice Network campaign group, added: ‘It’s simple: Clearsprings needs to say where BSS Ltd is registered and disclose who receives salaries and profits from it.
‘Clearsprings’ auditor and the government departments who oversee their contracts also need to confirm that they’ve seen proof of the services provided by BSS Ltd in return for millions of pounds of public money.’
The private firm has faced criticism for boasting of its ‘growth’ in annual accounts while cramming asylum seekers into tiny hotel rooms without beds.
Advocacy group Migrant Organise said the firm was making the lives of asylum seekers ‘miserable and sorrowful’, pointing to shoddy facilities, inedible food, mould and rodent and bed bug infestations.
Clearsprings made £62,500,000 in profits after tax for the year ending January 2023, doubling its earnings of £28,000,000 from the previous year.
HMRC said: ‘We cannot comment on identifiable individuals or businesses and we neither confirm nor deny investigations.’
Clearsprings declined to comment. King did not respond when contacted.
As Clearsprings did not provide information on BSS Ltd, it was not possible to confirm the firm for comment.
The Home Office said: ‘This contract was awarded under the previous administration. Contractors and their providers are closely monitored to ensure they are meeting the standards required.’
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