REVEALED: Labour slum landlord Jas Athwal’s wife’s paid NO tax on £150,000 from nursery business they run

Now-notorious ‘slum’ landlord Labour Party MP Jas Athwal has hit the headlines again. This time, a media outlet has found him running a chain of pre-school nurseries which were previously slammed by Ofsted. However, the Canary dig some further digging – and found that the tax affairs for his wife, while legal, are probably more at home in the Conservative Party.

Jas Athwal: slum… everything?

As the iPaper reported:

Athwal is also a director of a company called Village Day Nurseries which has three properties in Essex and Derby that provide care for up to 300 children under the age of five.

i can reveal that all of these nurseries have recently been criticised by the Government’s education inspector Ofsted after failing to meet child safety rules – including one where there was a “significant event relating to the supervision of children”, and another that was served a “welfare requirements notice” after it failed to meet child safeguarding requirements.

The nurseries have now taken action to rectify the problems and are currently ranked “good” by Ofsted.

However, this is not the end of the story. The iPaper noted that:

Mr Athwal does not declare any income from the nursery firm. Companies House records show that before he was elected an MP, his wife had received £165,000 in dividends from Village Day since 2020 that have been paid through a company she owns.

Until last month, Companies House records described Mr Athwal as one of the persons “with significant control” over Village Day Nurseries, although this changed in August when companies owned by his wife and business partner took over control.

The Canary disputes the iPapers figure of £165,000 in dividends paid to Mrs Athwal. Company accounts from 2020 onwards only show dividends of £100,000 being paid – with further payments being made to one of her companies.

Regardless, Mrs Athwal taking dividends is a tax-reduction mechanism. The tax rates for dividends are:

• 8.75% for basic rate taxpayers – versus 20% on normal income.
• 33.75% for higher rate taxpayers – versus 40% on normal income.

What the iPaper failed to note though, was the details of the Athwal’s companies – and specifically, what other money Mrs Athwal took from hers.

Tax reduction is us

The Canary looked at the accounts of Mrs Athwal’s company, Kids R Us Limited. They showed that she owes the company £467,000 in advances she took as the company’s sole director:

When a director takes advances from a company – which is perfectly legal – they have to pay it back within nine months of the end of the financial year in which it was taken. Otherwise, the company has to pay corporation tax penalties – 33.75% of the advance’s value.

What is clear from Kids R Us Limited’s accounts is that Mrs Athwal has not been repaying the advances in that time frame. For example, she had over £107,000 from 2022’s advance still outstanding at the end of 2023.

However, what we can’t tell from Kids R Us Limited’s accounts is whether or not the company paid a corporation tax penalty on this.

What does seem likely is that actually, far from taking the dividends from Village Day Nurseries as an income, Mrs Athwal may have simply used them as an accounting sleight of hand to pay back some of the advances.

Therefore, it is quite possible that she actually paid zero tax on any money she got from either Village Day Nurseries or Kids R Us Limited.

The Athwals: hardly Labour Party values – or are they?

That is, across two years Mrs Athwal took around £227,000 from Kids R Us Limited, paid back £50,000 of this via village Day Nurseries’ dividends, and paid the remaining £26,000 as a salary deduction – leaving her with around £150,000 as an “advance” from Kids R Us Limited on which she would not have paid any tax or National Insurance.

Note that on the company accounts, there are no details about how much she or any of the other 18 employees were paid. Moreover, her advances are interest free.

The Canary is not accusing either Jas Athwal or his wife of illegality. What we are saying is that they take full advantage of the way the system is set up to benefit the rich – by paying even less tax than the rest of us.

Are these the values of a Labour MP? Under Keir Starmer, clearly they are.

Featured image via the Canary