The multimillionaire deputy leader of Reform UK has been accused of breaking the law by allegedly failing to pay tens of thousands of pounds in tax on dividends – before sending the profits to an offshore trust registered in Jersey.

Richard Tice – who is the business, trade and energy spokesperson for Nigel Farage’s party – is alleged to have received at least £91,000 in excess payments as a result, the Sunday Times reported this weekend.

The MP for Boston and Skegness owned and ran property firm Quidnet REIT Ltd when it failed to deduct a mandatory 20% “withholding tax” on dividends paid to him and to the RJS Tice Family Settlement, a trust registered in Jersey.

Mr Tice posted on social media that “overall, HMRC received the correct amount of tax due” and described the claims as a “smear”.

Labour has called the row “a major scandal which goes to the heart of Richard Tice’s integrity and credibility”.

Under UK law governing Real Estate Investment Trusts (REITs), companies must deduct tax at source before distributing dividends to certain shareholders, including individuals and trusts. Quidnet did not do so on at least three occasions between 2020 and 2021.

The result was a tax shortfall of approximately £91,200 on dividend payments, totalling around £456,000 – money that should have gone directly to HM Revenue & Customs before any funds reached shareholders, including the Jersey trust.

The existence of the Jersey trust does not alter the company’s legal obligations.

Even if the tax was later paid by Mr Tice personally, the failure to deduct it at source still constitutes a breach of the rules and leaves the company open to enforcement action and penalties.

Records show the dividends were paid in a mixture of cash and shares – with both Mr Tice and his Jersey trust receiving more than they would have done had tax been correctly withheld.

In one instance alone, the trust’s shareholding increased beyond what would have been permitted under the law.

It comes after a Sunday Times investigation last month revealed that Quidnet avoided nearly £600,000 in corporation tax before funnelling dividends to mostly tax-efficient entities.

After the story was published, Mr Tice opened a press conference by dismissing the inquiries into his tax affairs as a smear and saying people should strive to pay the minimum tax legally possible.

Asked whether he encouraged members of the public to pay as little tax as permitted, the Reform UK deputy leader replied: “Yes, of course, that’s what you should do.”

Mr Tice also reposted a social media post from Reform branch chair Lee Nallalingham, which stated: “The tax was paid. A small technical error meant Richard Tice paid it personally instead of through the company. So HMRC got the full amount.”

It is not the first time the Channel Islands have been drawn into a row over the tax paid by Mr Tice’s property company.

Last month, The Sunday Times claimed Mr Tice avoided paying nearly £600,000 in corporation tax through a Real Estate Investment Trust which was listed on Guernsey-headquartered The International Stock Exchange.