The multimillionaire husband of Conservative peer and House of Lords member Baroness Michelle Mone, has been linked to a series of tax avoidance companies that may have assisted their clients in submitting misleading claims to HM Revenue and Customs, according to a report in The Guardian and elsewhere.

Documents relating to the activities of companies connected to Douglas Barrowman were obtained by the thinktank Tax Policy Associates, and have been seen by the Guardian and BBC Newsnight. Experts say the material raises questions about whether the companies in question, and those connected to them, should be investigated for any role they played in providing misleading information to HMRC about tax affairs.

The media reports claim that a company connected to Barrowman, AML, 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 with the loan charge, which came into effect in 2019. In March 2022, AML, was fined £150,000 by a tax tribunal.

According to Tax Policy Associates, Douglas Barrowman made more than £100 million selling ‘disastrous tax avoidance schemes’.

Barrowman has denied any wrongdoing. He has been battling to restore his reputation after he and his wife became embroiled in a scandal over the profits made from £200 million in contracts to supply personal protective equipment (PPE) to the NHS during the Covid pandemic.

Mone, who has taken leave of absence from the Lords but remains a Conservative peer, admitted last month she and Barrowman had lied to journalists about their involvement with a company called PPE Medpro, which is under investigation by the National Crime Agency. Mone also denied any wrongdoing.

Barrowman has also previously denied involvement in Vanquish Options, a firm that claimed customers could write off money owed to the government. Tax Policy Associates stated that evidence suggests Barrowman is lying. 

“We believe that the evidence shows that the AML and Vanquish schemes were fraudulent, that the Vanquish schemes relied upon a false document signed by key Barrowman personnel, and that Barrowman’s denial of any connection to Vanquish was a lie,” Tax Policy Associates continued. “Whether the criminal offences of fraud or tax evasion were actually committed are questions of fact, which ultimately a jury would have to decide, but we believe there is sufficient evidence for a prosecution.”

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.

BBC News spoke with contractors who subscribed to the AML scheme in 2011 and were left with huge tax bills. One of them is facing a £90,000 loan charge from HMRC.

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.

An analysis of the emails sent to people from Vanquish and from Barrowman's AML business shows they share the same IP address. BBC News has also found AML and Vanquish shared some of the same directors, including a man called Arthur Lancaster. A business partner of Barrowman, Lancaster has since been appointed director of PPE Medpro.

A spokesperson for Knox Group told The Guardian, “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,” the spokesperson continued.

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.

The spokesperson added, “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.”