The husband of Tory peer Michelle Mone is connected to a company that tax experts say should be investigated for fraud, BBC Newsnight has found.
Doug Barrowman has previously denied involvement in Vanquish Options, a firm that falsely claimed customers could write off money owed to the government.
But BBC News has identified Vanquish bosses with links to Mr Barrowman and seen emails sent by Vanquish from the same IP address as his Isle of Man HQ.
Mr Barrowman has denied any wrongdoing.
Tax experts suggest there are grounds to open a criminal investigation into Vanquish Options.
One of Mr Barrowman’s firms, PPE MedPro, is already being investigated by the National Crime Agency over contracts worth more than £200m to supply PPE to the NHS during the Covid-19 pandemic.
‘Destroyed my life’
In March 2022, a company owned by Mr Barrowman, called AML Tax (UK) Limited, was fined £150,000 by a tax tribunal.
HMRC, the UK’s tax authority, said the firm was part of Mr Barrowman’s Isle of Man-based Knox Group, and accused it of “aggressively” promoting tax avoidance schemes in the UK. HMRC referred to the firm as “Doug Barrowman’s tax avoidance firm”.
His company sold schemes to self-employed contractors in the 2010s, on the promise they could avoid UK income tax by having their earnings funnelled into an offshore trust.
The trust would then transfer the cash back to the contractor as a loan, which would supposedly never need to be repaid. Loans, unlike wages, are not subject to income tax. But the government clamped down on the schemes in 2016, bringing in new legislation.
This made those who had accrued such offshore loans liable for “loan charges”, effectively requiring them to retrospectively pay back the income tax they had avoided.
BBC News has spoken to contractors who subscribed to the AML scheme in 2011 and were left with huge tax bills.
One of them is Doug Adams, who is facing a £90,000 loan charge from HMRC and says the financial fallout and stress has had a disastrous impact on his mental and physical health. He links it to the breakdown of his marriage and a divorce settlement that is forcing him to sell his home.
“It has effectively destroyed my life. It’s meant that, at the age of 56, I’m going to be homeless,” he said.
AML clients were then sent letters recommending they contact a third company, called Vanquish Options.
Vanquish was offering another scheme that would supposedly make the individual’s loan charge problem go away, if customers paid a large fee to swap their existing loan for another loan.
The company was giving people advice that this transaction would square them with the tax authorities.
Tax Policy Associates, which conducted an investigation into the practice, has shared a letter with BBC News. It was sent to someone who signed up to the Vanquish scheme in April 2019.
The letter was intended to be sent to HMRC by the individual to explain why they were no longer liable for a loan charge. In it, the customer would claim they now had “no outstanding liability”.
Tax experts believe this document provides grounds to investigate whether Vanquish Options was engaged in fraud towards HMRC.
It is unclear what, if any, Barrowman’s involvement in the potential fraudulent letters was, but he has defended the lawfulness of the scheme in his response to the BBC.
However, Ray McCann, a former president of the Chartered Institute of Taxation and a former HM Inspector of Taxes, told the BBC: “I think there’s undoubtedly enough for HMRC to justify opening a criminal investigation.”
Mr Barrowman has previously denied any involvement in Vanquish.
In 2019, a spokesman told the Times newspaper he had “no involvement or interest in Vanquish Options”. In 2020, Mr Barrowman’s lawyers told the BBC he had not “at any time owned or controlled Vanquish”.
However, an analysis of the emails sent to people from Vanquish and from Mr Barrowman’s AML business shows they share the same IP address – a unique label that identifies a device on the internet or a local network – in the Isle of Man, where his business operations are based.
BBC News has also found AML and Vanquish shared some of the same directors, including a man called Arthur Lancaster.
Mr Lancaster, a long-time business partner of Mr Barrowman, has since been appointed director of PPE Medpro, which was awarded contracts worth more than £200m to supply PPE to the NHS.
As well as the National Crime Agency investigation, the firm is also being sued by the government for breach of contract.
In a recent BBC interview, Mr Barrowman and his wife Baroness Mone admitted intentionally misleading the press over their connection to PPE Medpro.
As well as Mr Lancaster, the investigation into Vanquish’s directors also found they included Timothy Eve and Paul Ruocco – two close business associates of Mr Barrowman.
Retrospective legal action
Lawyers for Mr Barrowman’s Knox Group denied “any and all allegations of dishonesty, misconduct and wrongdoing”.
In a statement, it said HMRC was “properly notified” of the schemes and that there had been “extensive dialogue and disclosure” with tax authorities for “several years”.
During this time, it said HMRC had “never even suggested, let alone alleged, that there has been any form of dishonesty or wrongdoing by the Knox Group”.
Knox Group “deeply and sincerely” regretted the distress and anguish arising from the HMRC loan charge, which it blamed on “retrospective” and “retroactive” legal action from the government.
However, Dan Neidle, founder of Tax Policy Associates, told BBC News that it would send a “deeply corrosive” message if HMRC did not take action against these companies connected to Mr Barrowman in light of the new evidence.
“It means that you can ignore tax law. You can make up tax schemes that have no prospect of working. You can sell them to people, extract large amounts of money from people, and then when it all goes wrong, you can just walk away, hide in an offshore island.”
An HMRC spokesperson said: “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. We neither confirm nor deny investigations and cannot comment on identifiable individuals or businesses.”
Mr Lancaster did not respond to BBC request for comment.
Additional reporting by Will Dahlgreen, BBC Verify data journalist, and Sean Clare, BBC Newsnight producer
Watch the full investigation on BBC Newsnight on BBC2 at 22:30 GMT and on BBC iPlayer.