Care home giant cuts taxes with £80m gifts

Former pensions minister calls for transparency as Barchester owners spend big on connected charities

ONE of the UK’S biggest care home landlords faces scrutiny over £80m it has made in donations, and a golf tournament featuring Tiger Woods.

Limecay, which leases properties to Barchester Healthcare, has given the cash to charities connected to its owners over the last two years – sharply reducing its tax bill.

The landlord, whose parent company is registered in the British Virgin Islands, made donations of £47.4m to two connected charities in 2018, and £32.3m to one in 2017.

Although its ownership is not public, filings show Limecay is controlled by shareholders who also have stakes in Barchester. The care home firm’s owners include the Irish billionaires JP Mcmanus, 68, Dermot Desmond, 69, and John Magnier, 71.

Mr Mcmanus is the founder of a charity that is funding this year’s Proam Golf Tournament in Ireland with €46.8m (£40m) from a connected donor. The golf tournament did not respond to questions and Limecay solicitors did not respond to request for comment.

Baroness Ros Altmann, a former pensions minister, said: “It’s commendable to see businesses supporting charities, but I would urge full transparency on what is happening with the money. This is a sector where we already know there is a huge shortage of funding – families have an interest in knowing that the care homes are being run as fairly and efficiently as possible.”

Barchester operates more than 200 care homes and six mental health hospitals, looking after 10,000 residents.

Limecay did not say which charities it had funded. As well as Mr Mcmanus’s foundation, Mr Magnier backs a private charitable trust to help those suffering hardship in Ireland.

The donations come amid rising concern over rent levels in the care home industry, which is in crisis due to a combination of high debts, rising costs and weak government funding. Analysts say 101 care homes went bust in 2018.

Barchester has remained in the black, making profits of £17.3m in 2018 on turnover of £621m. Bosses said a 5.1pc increase in turnover was driven by higher fees and also higher occupancy.

The rent to Limecay – paid by Barchester’s parent company, Grove – was £102m last year, compared with £66m in 2007. Barchester’s estate grew from 10,500 registered beds to more than 12,000 during that time.

Barchester was in line to be sold to Australian bank Macquarie last year for a reported £2.5bn, but the deal fell through in July.

The exact size of Mr Mcmanus’s, Mr Desmond’s and Mr Magnier’s stakes in Barchester are unclear although it has been reported they own half.

Limecay was set up in May 2006 when Barchester was restructured into property and operating companies. It says it is owned by common controlling shareholders of Barchester, but does not identify who they are in its publicly available accounts.

Last year, the JP Mcmanus Charitable Foundation received donations of €46.8m “from a beneficial shareholder of a company that is connected to some of the directors”, according to its latest accounts. Mr Mcmanus’s wife, Noreen, is a director of the foundation. The money was allocated for this year’s JP Mcmanus Pro-am golf tour, a major annual competition which has raised €140m for good causes. It is due to be held this July at Adare Manor, Limerick, and will feature star players including Rory Mcilroy and Tiger Woods.

Mr Magnier’s John and Susan Magnier Foundation did not respond to a request for comment about whether it had received donations from Limecay.

Accounts for Limecay Ltd show that the charitable donations were counted as “expenses” in 2018, helping to cut taxable profits to £66m and £99m in each year. Limecay’s UK subsidiary paid £18m in UK tax in 2018 and £20.8m the year before.

Barchester owners Mr Mcmanus, Mr Desmond and Mr Magnier are among Ireland’s richest businessmen. The Sunday Times Rich List last year valued them at €1.4bn, €2bn and €1.7bn respectively.

They are also major philanthropists. As well as the JP Mcmanus Charitable Foundation, Mr Mcmanus has set up the JP Mcmanus Benevolent Fund, which supports community initiatives and non-profits throughout the west of Ireland, and the All Ireland Scholarships fund for university students.

Barchester declined to comment.

‘It’s good businesses backing charities, but I’d urge full transparency on what is happening with the money’