Barclay brothers' tax shock

SIR David and Sir Frederick Barclay, the new owners of the Telegraph newspaper group, pay negligible tax on their UK businesses, scrutiny of their companies' latest accounts reveals.

The reclusive twins, who live on their own island in the Channel Islands, won the newspapers last week with a bid of £665m.

During the course of the auction, advisers to Hollinger, the company selling the Telegraph, are believed to have investigated the Barclays' financial status and concluded they controlled companies with £7bn revenues. They also believe that the Barclays' personal wealth is about £1.2bn - more than twice the figure usually attributed to them.

Examination of the Barclays' companies, all of which are privately held, suggests their wealth may be partly attributed to their success at minimising tax liabilities. For instance, Holyrood Holdings, parent company of The Scotsman newspapers, made £4 million pre-tax profit in the year ended December 31, 2002, but paid just £17,000 in tax.

Another company, January Investments, controls former retail group Sears, now a property management firm. It made £8.6m profit, paid £16m dividends, but paid no tax in the year ended January 31, 2003.

A spokesman for Barclays said their companies complied with all tax regulations.