As one of the world’s wealthiest men, Sir Richard Branson is used to travelling by private jet, holidaying with politicians and hobnobbing...
As one of the world’s wealthiest men, Sir Richard Branson is used to travelling by private jet, holidaying with politicians and hobnobbing with A-listers.
But neither his estimated £4 billion fortune nor his audacious networking skills could save the Australian arm of his airline from going into administration yesterday.
Virgin Australia, the country’s second biggest aviation company, went into voluntary administration after failing to secure a £710 million bailout from authorities, the largest airline victim of the coronavirus crisis so far.
As one of the world’s wealthiest men, Sir Richard Branson (second from right) is used to travelling by private jet, holidaying with politicians and hobnobbing with A-listers
Now Branson, 69, is battling to save Virgin Atlantic from a similar fate by begging the British Government for a £500 million loan —and offering to mortgage Necker Island, his private Caribbean retreat believed to be worth £80 million.
The business mogul pledged to ‘raise as much money against the island as possible to save as many jobs as possible’ in an attempt to persuade the authorities to help Virgin through ‘the devastating impact this pandemic continues to have’.
But whether the Government will be willing to bail out a man who lives in a tax haven and apparently hasn’t contributed a penny of his personal income to the country’s coffers for 14 years is another matter.
Despite Branson’s protestations that Necker Island’s zero per cent personal income tax rate had nothing to do with his decision to move there, his status as a billionaire tax exile is said to be one reason why ministers are wary of bailing out the airline.
They know how toxic it would seem to hand over taxpayers’ cash to — as one Whitehall official put it to the Mail — ‘tycoons with neatly trimmed beards who live on their own private island’.
Although the holding company of Branson’s sprawling Virgin Empire — which encompasses more than 60 subsidiaries, from gyms to music and healthcare — has its headquarters in Paddington, London, it is registered in the British Virgin Islands, where there also happens to be no corporation tax.
Branson has stated in a memo to staff that ‘our companies all pay tax in the countries they operate in’. The company says that, for example, Virgin Enterprises Ltd, the brand licensing business, is based in the UK and pays tax on its profits in the UK — and that there are a lot of other taxes, such as Air Passenger Duty, employer taxes and VAT, that should be taken into account.
But because his empire is so complex and fragmented, it is almost impossible for anyone to know precisely how much tax he does pay.
A Virgin spokesman says: ‘Richard spends the vast majority of his time starting not-for-profit ventures and raising millions for charity through speeches and other charitable engagements.
‘Since he gives 100 per cent of any monies he earns from these activities to charity, it makes no difference for his personal tax purposes whether he is located in the UK or the BVI (British Virgin Islands).’
Despite Branson’s protestations that Necker Island’s zero per cent personal income tax rate had nothing to do with his decision to move there, his status as a billionaire tax exile is said to be one reason why ministers are wary of bailing out the airline
Virgin also stressed that not only do its businesses ‘pay tax on the profits they make, meeting their obligations in full’, but that they are ‘a vital contributor to the UK economy’ — citing Virgin Atlantic, which pays wages of around £450 million and contributes approximately £350 million to HMRC each year.
Even so, Branson’s behaviour since coronavirus crippled the aviation industry last month has been questioned by many.
Although he has pledged almost £200 million of his personal fortune to help salvage the Virgin Group, a large portion of which will go to Virgin Atlantic, he initially asked thousands of staff to take unpaid leave when the coronavirus first hit, before using the Government’s furlough scheme — funded by the taxpayer — to pay more than 8,000 people, from a total staff of around 10,000, 80 per cent of their wages for three months.
There is no doubt Branson’s whole empire — begun with just one plane 36 years ago — is under pressure.
He recently lost both his rail franchises, while Virgin Atlantic has recorded losses of £76 million over the past two years — blamed by Virgin on high fuel costs, Brexit uncertainty and a weak pound.
His gym network, meanwhile, has been closed during lockdown, while his leisure and hospitality divisions — including Virgin Holidays, Virgin Hotels and Virgin Experience Days — will also suffer acute loss of income. But arguably his most valuable asset, which has sentimental value to him and which he once described as his ‘best financial move’, is Necker Island.
The tropical idyll bought for a steal
When Branson — who co-founded Virgin Records in 1972 — heard there were Virgin islands 200 miles northwest of Antigua, and that one might be for sale in 1978, his interest was piqued.
‘We were still in the early days of Virgin Records and I by no means had the cash to buy an island,’ he said. ‘Luckily, the realtor didn’t know this and offered me an all-expenses-paid trip to see the islands that weekend. I agreed to go on one condition — that I could bring a guest.
‘When I saw this magical island from the air, I’d never seen anything more perfect — apart from the beautiful lady in the helicopter with me, who I was wooing.’
He vowed to ‘capture them both’.
Although the owner of Necker Island wanted £4 million for it, Branson, then 28, persuaded him to part with the 74-acre island for around £102,000 a year later, when it was still on the market — a staggering discount.
Branson spent £7 million turning it into a paradise for the super-rich and married the guest he had bought for that first viewing — now his wife Joan — on the island’s white-sand Turtle beach in 1989.
By 2006, Branson estimated that the island had increased in value to about £40 million.
£83,000 a night . . . but free for celeb pals
Now — or at least, pre Covid-19 — Necker was a money-spinner.
Renting the whole island costs £83,000 a night (but free for celebrity pals). Up to 40 guests can stay in 20 bedrooms in several buildings, and 16 more people can be housed on neighbouring Moskito Island, which he also owns.
He also rents out individual rooms, including the master suite in his private residence, Temple House, from £5,510 a night, and in six Balinese-style villas for £3,713.
His mini-submarine can be hired for around £17,000 a week.
Among the celebrities who have stayed there free is Kate Moss, a friend of Branson’s, who was reportedly gifted the island to spend a week celebrating her 40th birthday in 2014.
Make a splash in a hot tub for 30
Butlins, it ain’t. The facilities include two tennis courts, two infinity pools, a 30-person hot tub on the beach and watersports from windsurfing to scuba diving, which can be reached by a zip wire that takes guests from the highest point in the main house on the island to the waterside.
Food and alcohol are included — as you’d hope at that price — and there are three chefs available. In the 2015 BBC Two documentary Billionaire’s Paradise: Inside Necker Island, head chef Clement Baris, whose supplies are brought in by boat and plane, recalled one guest asking for caviar, ‘which in the Caribbean on a Bank Holiday was a challenge. He asked for it at 8 in the morning, we finally got it at seven in the evening.’
Parties are said to be extravagant (‘well, you’re not here to sleep!’ reads the promotional blurb on the island’s website), with casino nights, discos and beach parties.
Blurred boundaries for staff and guests
Your every whim is catered for by about 100 discreet staff, who reportedly abide by the maxim that what happens in Necker stays in Necker.
Around 20 staff live on the island year-round (the rest are brought in by boat) and although the staff quarters are on the other side of the island, employees are encouraged to socialise with guests.
So much so that when a new management team tried to ban staff from drinking with guests, an unimpressed Branson appears to have sacked them because, he said in 2015, ‘they brought in two rules. The first was that staff could not drink with the guests; the second was that staff may not have relationships with the guests. That management couple lasted one weekend. That is not the way this island would work very well.’
Described as a ‘matchmaker’ by one member of staff, Branson conducts business from his turquoise pools in flip-flops, while waiters have been known to be topless.
There are no stuffy suits for the corporate bods, either. One of Necker’s accountants, an expat from Luton called Milli, told the BBC Two documentary that she once let guests eat sushi off her body, after her admittedly bizarre suggestion that they eat sushi ‘off a hot girl’ was misconstrued.
‘I love that I get to be an accountant, then lie on a table and have people suck soy sauce out of my belly button. Who else gets to do that?’ she asked. Quite.
Awash with romance
This is not, perhaps, the best island for social distancing.
One guest recalled finding condoms in the vanity kit along with lip salve and sun lotion during a 2015 stay, while the list of couples who have either embarked on a relationship at Necker or consolidated their romance there reads like a Mills & Boon for the world’s most powerful.
Rolling Stones singer and guitarist Ronnie Wood honeymooned there with third wife Sally in 2012. In 2013 Branson’s daughter Holly wed shipmaker Freddy Andrews on Turtle Beach, with her friends Princesses Beatrice and Eugenie among the guests.
Branson himself officiated at his friend and Google co-founder Larry Page’s wedding to girlfriend Lucy Southworth in 2007, at which U2’s Bono was a guest.
Perhaps Branson’s highest profile guest was Barack Obama, who visited Necker in January 2017 with wife his Michelle
Before her 40th, Kate Moss reportedly started her fling with model Jamie Burke — a friend of Branson’s son Sam — after meeting him on the island in 2005.
It’s not a bad environment for broken hearts, either. After pop star Harry Styles broke up with singer Taylor Swift in 2013, he was pictured in the Necker Island hot tub with two blonde women.
A little too close for comfort?
In 2017, one of singer Joss Stone’s backing singers, Antonia Jenae, accused Branson of putting his head down her cleavage and making strange noises after she was invited to the island.
‘We were by the bar and he was saying bye to everyone,’ recalls Antonia, a mother of two from Florida. ‘He came up to me and put his face in my breasts. He went “brrrrrr” and just walked away.’
A Branson spokesman said: ‘Everyone appeared to enjoy their time on the island. Richard has no recollection of this matter and neither do his family and friends, who were with him on the island at the time. There would never have been any intention to offend or make anyone feel uncomfortable in any way, and Richard apologises if anyone felt that way.’
Other A-list visitors include Hollywood stars Robert de Niro, Demi Moore and David Hasslehoff, Rolling Stone Ronnie Wood and Mariah Carey
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