Doug Barrowman-linked firm hid offshore entity from client

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An Isle of Man company linked to Doug Barrowman misled a client into believing they were dealing with a UK entity in an apparent attempt to covertly benefit from the island’s more lax tax regime, according to documents seen by the Financial Times.

Barrowman, husband to Conservative peer Baroness Michelle Mone, rose to prominence over £200mn worth of controversial government contracts his company PPE Medpro won during the Covid-19 pandemic. Both are under criminal investigation in relation to the contracts.

One firm linked to Barrowman, Smartpay Limited, is an “umbrella company” used by recruitment agencies to pay workers. Smartpay ran a tax avoidance scheme where it would pay workers partly via a loan in an attempt to minimise their taxable wages, according to a 2022 tax tribunal ruling.

Smartpay was founded in 2014 as part of the Knox Group of businesses, whose chair and founder is Barrowman.

In 2015, Smartpay told a recruitment agency that it was an onshore company and provided information about its UK-registered entity of the same name, including company reference number, tax number and company filings, according to a document seen by the FT.

Just a day earlier, Smartpay signed a contract also seen by the FT with a worker who was being supplied to the recruitment agency. That contract describes Smartpay as an Isle of Man registered entity, also called Smartpay Limited.

Steve Willmore, head of operations at the recruitment agency in that case, Fuel Recruitment, told the FT his company only works with UK-registered companies and was only ever engaged with Smartpay Ltd in the UK.

Willmore said he had “no knowledge of a business registered in the Isle of Man”. He added Fuel Recruitment obtained a signed declaration from the UK company to confirm it was compliant with HM Revenue & Customs guidance about the use of “umbrella…