DOCUMENTS have been revealed which suggest a connection between Michelle Mone’s husband and a company that tax experts believe should be investigated for fraud.
Doug Barrowman previously denied any connection to Vanquish Option, which is just one of a series of tax avoidance companies the documents mention.
The files relating to the companies and Barrowman were obtained by the think tank Tax Policy Associates and have reportedly been seen by The Guardian and BBC Newsnight.
BBC News identified links between Vanquish and Barrowman by identifying emails sent to the company with the same IP address as his home in the Isle of Man which he shares with ex-Tory peer Mone.
It is understood Barrowman has denied any “allegations of dishonesty, wrongdoing and misconduct”.
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Lawyers for Barrowman and Knox Group said: “Our client does not propose to rehearse its legal position in correspondence with you. However, your outright and unqualified allegations of dishonesty, wrongdoing and misconduct are denied by our clients in their entirety.”
Barrowman previously faced a hefty tax bill after his firm failed to provide legally required information to HMRC.
AML Tax (UK), a tax avoidance firm and part of Barrowman’s Isle of Man-based Knox Group, was fined in an Upper Tribunal case and had to pay a £3.3 million tax bill.
Back in 2019, the firm was struck off the Companies House register for not filing accounts. AML Tax supported a loan-based tax avoidance scheme which left thousands of the contractors it recruited with large bills to pay to HMRC.
It was found by the court that the firm had for years “aggressively promoted tax avoidance schemes” and was subsequently fined £150,000 for not giving HMRC information it required.
AML recommended its clients contact another company, Vanquish Options – which Barrowman denied having any involvement with.
Based on the documents sent to journalists, it is reported tax experts believe there are grounds to investigate whether Vanquish Options was engaged in fraud towards HMRC.
It was also found that AML and Vanquish shared some of the same directors, including Arthur Lancaster, who is a long-time business partner of Barrowman and director of PPE Medpro.
In a recent BBC interview, Barrowman and Mone admitted intentionally misleading the press over their connection to PPE Medpro.
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A spokesperson for Knox Group said: “This investigation is based on a partial and incomplete understanding of the facts. HMRC has had disclosures of all relevant documents and information relating to the loan charge arrangements for a lengthy period and both parties have been engaged in an ongoing and extensive process of dialogue and disclosure with the HMRC for several years in relation to such schemes.
"HMRC has never even suggested, let alone alleged, that there has been any form of dishonesty or wrongdoing by the Knox Group. To allege otherwise is speculative and not justified.
“At least 50,000 people were affected by the loan charge. Literally hundreds of companies and advisers sold these legally compliant arrangements at the time. The Knox Group accounted for a tiny percentage of this number overall.
“The Knox Group deeply and sincerely regrets that any contractor or their families suffered any distress or anguish arising from tax charges levied by HMRC when it retrospectively amended the relevant legal framework.
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“This retrospective change in the law was a matter of industry-wide criticism at the time from bodies – such as the Chartered Institute of Taxation and the Institute of Chartered Accountants.
“The Knox Group denies any and all allegations of dishonesty, misconduct and wrongdoing.”
An HMRC spokesperson said: “We neither confirm nor deny investigations and cannot comment on identifiable individuals or businesses. We collect the tax due under the law, creating a level playing field for everyone and funding public services. We are determined to drive promoters of tax avoidance out of business.
“The loan charge seeks to recover tax that has been avoided by disguising income as loans. It is our responsibility to collect the tax that people owe.
“We take the wellbeing of all taxpayers very seriously and recognise that dealing with large tax liabilities can lead to pressure on individuals. Above all, we want to prevent people getting into these types of situations and our message is clear – if a tax scheme sounds too good to be true, it probably is.”
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