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HM Revenue and Customs has reached a deal to move tax officials to a new office complex in Newcastle owned by major Conservative Party donors through an offshore company based in a tax haven, the Guardian can reveal.

The department’s planned new home in northeast England is part of a regeneration program developed by a British Virgin Islands (BVI) entity controlled by billionaire property moguls David and Simon Reuben.

The deal will see officials from the ministry responsible for preventing tax evasion working from a site owned by a subsidiary of a company based in a secret offshore tax jurisdiction.

The Reuben brothers, their family members and their businesses have donated a combined £ 1.9million to the Tories. Earlier this week, the brothers reportedly shared a table with Boris Johnson at an exclusive Conservative Party fundraising dinner.

On Tuesday, officials including Cabinet Office Minister Steve Barclay announced that HMRC had entered into a 25-year lease with one of the Reuben brothers’ companies.

The brothers are the second richest family in the UK, according to the Sunday Times rich list. David Reuben’s son, Jamie, is a close ally of the Prime Minister and has served as the Conservative Party’s treasurer. He has donated over £ 750,000 to the party since Johnson entered Downing Street.

The Reuben family have established a significant presence in Newcastle in recent years and are part of the controversial Saudi-led consortium that acquired football club Newcastle United in October.

Documents filed by the company show the family have frequently used BVI companies to hold their UK business interests, which include a luxury property portfolio in London and a series of racetracks.

A spokesperson for HMRC said the Newcastle office complex is owned and will be developed by a UK company, Reuben Brothers (Newcastle) Limited. However, documents filed by Companies House show that the only shareholder in the company when it was incorporated earlier this year was Taras Properties Limited in BVI.

Taras Properties first acquired the site in 2013 and transferred ownership of the land to the UK company in June this year for £ 10million, according to land registry records. BVI has several large plots of land in the center of Newcastle, in the area surrounding the planned HMRC offices.

A spokesperson for the Reuben brothers confirmed that the UK company is owned by Taras Properties, but insisted the subsidiary “operates and pays taxes as a UK company”.

The HMRC spokesperson insisted that the Reuben brothers’ company would be subject to normal UK tax regulations. “Lease payments and all gains on the sale are subject to UK tax,” they said. “HMRC is convinced that the deal represents the best value for money for the taxpayer. “

There is no suggestion of wrongdoing on the part of the Reuben brothers and owning property in the UK through offshore companies is perfectly legal.

But the government’s decision to relocate 9,000 HMRC employees to the site comes as it faces calls to honor its pledge to introduce a register of foreign companies with property in the UK. The bill, first published in 2018, is designed to crack down on the use of offshore companies to hide the identity of owners and their source of funds.

Tackling offshore tax avoidance and evasion is described as one of HMRC’s priorities and earlier this year the department unveiled plans to tackle offshore tax evasion by targeting UK-based entities. Uni facilitating the sale of evasion schemes using tax havens.

Responding to the decision, Dame Margaret Hodge, Labor MP and Chair of the All-Party Parliamentary Group on Anti-Corruption and Responsible Taxation, said: “It is outrageous that HMRC is using taxpayer money for somebody’s benefit. one that depends on offshore structures. based in tax havens.

Do you have any information on this story? Email harry.davies@theguardian.com


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