Nevertheless, Julian Richer, who founded the electronics retailer in 1978, was still paid £10.5 million as part of the deal he struck almost four years ago to sell most of the business to its employees.
Richer, 63, sold 60 per cent of the company to an employee ownership trust in 2019. The company was understood to be valued at nearly £100 million then and Richer agreed that the £60 million or so he was owed could be paid over a 15-year period.
He was paid an initial £9.2 million upfront, but immediately gave away a third of that to staff. Since the beginning of the pandemic, he has received a further £24.5 million, documents filed with Companies House show. That includes a £7 million payment made during the company’s 2021-22 financial year and a further £3.5 million payout last summer.
As the sale was to an ESOP that revenue to Richer is entirely tax free. Legally, as a matter of public policy.
And you can have any view you like on whether encouraging the creation of ESOPs is a justified use of tax breaks but there’s no doubt at all that Richer has not just obeyed the rules here but he’s also done so entirely according to the spirit of them.
It just amuses me terribly that some portion of this money is then spent on supporting Tax Watch, with Richard Brooks (the bloke at Private Eye who made all those claims about Vodafone etc). You know, the people who whine incessantly about people using the tax system expressly and exactly as it is both designed and meant to be used?