Ukip hopes release of benefactor’s tax cheque will end speculation about financial affairs of former Tory donor

This article is more than 5 years old

This article is more than 5 years old

A former Tory donor who pledged £1m to Ukip, only to face criticisms for basing his business interests in tax havens, has released evidence that he paid £1.86m in British tax this year.

Arron Banks, a businessman from Bristol, claimed on the day of David Cameron’s conference speech that he had once given £250,000 to the Tories but would now give £1m to Ukip instead.

The Tories said they could not find a record of his donations, saying they could only locate a £25,000 gift. He then faced questions because some of his businesses appear to be based in the low-tax jurisdictions of Gibraltar and the Isle of Man.

But Banks’s public relations chief, Bridget Rowe, a former Sunday Mirror editor, released a copy of a cheque sent by Banks to HM Revenue & Customs for £1.865m in February this year.

The cheque supplied by Banks as proof he paid tax in Britain this year. Photograph: Arron Banks

Ukip hopes that the document will help to quell questions about Banks’s tax affairs since he emerged as one of Britain’s most generous political donors on Wednesday.

His money will be used to fund the general election campaign as Ukip threatens to destabilise the three main Westminster parties.

Companies House records, which are supposed to show a comprehensive record of past and present interests of a director, appear to show that Banks has set up 37 different companies using slight variations of his name.

Using the name Aron Fraser Andrew Banks, he was a director of Eclipse Insurance Services but resigned in 1995, records show.

Arron Banks is registered as a secretary of African Compass Trading, which appears to be still trading.

The same company is also registered as having a director called Arron Andrew Fraser Banks who is also still involved in another firm, Vavista Ltd.

Under the name Arron Fraser Andrew Banks he is registered as a former director or former secretary of 34 different companies, but has resigned from all of them.

The first, third and fourth names, according to Companies House records, use the same date of birth but register different lists of companies.

A spokesman for Banks said that he declined to answer questions over his Companies House entries as well as other matters and preferred instead to “correct [the Guardian’s] mistakes in court”.

Banks appeared to come from nowhere last week when a press release from the anti-federalist party announced that a major Tory donor had defected, following the defections of the MPs Mark Reckless and Douglas Carswell.

The businessman who had made his fortune from insurance announced a tenfold increase in his planned donation to Ukip – to £1m – after William Hague told the BBC he had not heard of him.

Ukip claimed that he had given £250,000 to the Tories. But from Electoral Commission records, he gave £5,000 under the name Arron F Banks in May 2009 to Thornbury and Vale Conservative Association; and a second payment of £20,000 to Northavon Conservative Association in January 2007.

A Ukip source said that he had also loaned £75,417 to Thornbury and Yate Conservative party through his former company Panacea Finance in September 2007. This loan was registered on the Electoral Commission’s website and has to be paid back in 2022.

However, Companies House records show that Banks resigned from the company in September 2005, two years before the loan was granted. This raises questions over whether he was controlling the firm at the time, or whether he was using the firm as a “proxy donor”.

Banks’s office declined to send a further explanation of how else he had paid the Tories any money.

The Conservatives have also said they can find no record to substantiate Banks’s claim that he was a Tory party official in Basingstoke.

Again, Banks declined to comment.

Interest in Banks increased when it emerged that his Facebook page included photographs of him holding a shotgun and sitting in a red sports car.

Banks, 48, says he is worth about £100m. Friends say that he has a controlling interest in a former De Beers diamond mine in Kimberley, South Africa, and another licence to mine in Lesotho.

He met the media before a black-tie fundraising dinner for a Belize children’s hospital on Wednesday night. One of the dinner guests was Kim Simplis-Barrow, the wife of the Belize prime minister, Dean Barrow.

Rock Services Ltd, of which Banks is a director, had a turnover of £19.7m last year and paid corporation tax of £12,000. The company deducted £19.6m in “administrative expenses”.

The main activity appears to be “recharge of goods and services” with Southern Rock Insurance Company – a part of the group of companies that is based in Gibraltar. Southern Rock Insurance states on its website that it underwrite policies for the customers of GoSkippy.com, which is run by Banks. Because it is based in Gibraltar, there is little information available on it.

Rock Services and Southern Rock Insurance’s ultimate holding company is Rock Holdings Ltd, a company based on the Isle of Man.

Banks dismissed questions about his decision to base some of his firms in the low-tax jurisdictions.

Asked if his companies paid full corporation tax, he said: “I paid over £2.5m of income tax last year so I’m not going to get knocked on that one, thank you very much. I really resented that, by the way. My insurance business, like a lot of them, is based in Gibraltar but I’ve got UK businesses as well that deal with customers and pay tax like everyone else.”

Charlie Elphicke, a Conservative MP and former tax lawyer, said: ‘Everyone knows that companies in tax havens like Gibraltar and Bermuda are often used to help minimise tax. This evidence raises serious questions about Mr Banks’s conduct and consistency of identity.”