TaxWatch has lodged a formal complaint to the Institute of Chartered Accountants of Scotland (ICAS) in respect of its member, Douglas Barrowman. We suggest there may be numerous grounds for an investigation into Mr Barrowman, many of which stem from his failure to register himself as a Person of Significant Control (PSC) for PPE Medpro Ltd at Companies House1At no point since the creation of the company on 7th May 2020, was Douglas Barrowman registered as its Person with Significant Control (PSC). Initially, Mr. Anthony Page was named as the sole PSC and … Continue reading.
One of the two people actually registered as a PSC is Arthur Lancaster, who was the subject of an earlier TaxWatch complaint to the Institute of Chartered Accountants England & Wales (ICAEW) and the Chartered Institute of Taxation (CIOT).
Person of Significant Control
Beneficial ownership requirements place mandatory obligations on companies registered with the UK’s Companies House to disclose anyone who, by way of ownership or through other means, exert significant control over the conduct of the corporate entity. The failure to register oneself as a PSC can constitute an offence under the Small Business, Enterprise and Employment Act 20152See ‘The PPE cover-up: Douglas Barrowman’s hidden ownership and the potentially criminal consequences’ https://www.taxpolicy.org.uk/2023/08/13/ppe_medpro/.
TaxWatch believes Mr. Barrowman was the PSC of the company because of his admission that he was “the ultimate beneficial owner” of PPE Medpro, in a recent interview with Laura Kuenssberg of the BBC3See BBC iPlayer episode first aired 17 December 2023. https://www.bbc.co.uk/iplayer/episode/m001v97h/michelle-mone-admits-she-lied-but-says-shes-a-scapegoat (23:48 onwards) .
TaxWatch suggests that this omission to register as PPE Medpro Ltd’s PSC was a breach of ICAS’s rules. ICAS members are bound by the institute’s Code of Ethics which specifically states:
“A professional accountant shall not knowingly be associated with reports, returns, communications or other information where the accountant believes that the information:
(a) Contains a materially false or misleading statement;
(b) Contains statements or information provided recklessly; or
(c) Omits or obscures required information where such omission or obscurity would be misleading.” 4ICAS Code of Ethics January 2022 onwards (earlier equivalents available) see https://www.icas.com/__data/assets/pdf_file/0010/616708/ICAS-Code-of-Ethics-Applicable-from-1-January-2022.pdf. … Continue reading
Members are also bound by the Professional Conduct in Relation to Taxation (PCRT), in particular the principle of integrity, which:
‘imposes an obligation on all professional accountants to be straightforward and honest in professional and business relationships. Integrity also implies fair dealing and truthfulness.’
Watchdogs or Sleeping Dogs?
Mr Barrowman’s case raises a bigger issue, which is the extent to which professional bodies pro-actively monitor, and respond to, information in the public domain about the activities of those they purport to regulate.
There has been a high level of media coverage of Mr Barrowman’s business activities in recent years, in part because he is married to Conservative Peer Baroness Mone. The coverage includes reports of an investigation into PPE Medpro by the National Crime Agency and a charge of fraud in Spain5D. Gadher and H Yorke. ‘Questions over who really owns PPE firm linked to Mone given £200m’ The Times (13/08/23) … Continue reading.
Yet, when TaxWatch contacted ICAS in early November to ask whether they were investigating Mr Barrowman, it took more than a month to receive any response. In that response, ICAS said that it was only ‘continuing to monitor developments’, and didn’t refer to any active steps being taken to actually investigate the conduct of their member.
Interestingly, Mr Barrowman’s contact details are included on the ICAS members register as “c/o ICAS”, making it hard to determine whether Mr Barrowman was indeed a member. ICAS’s response just before Christmas confirmed this to be the case.
There is significant public interest in the conduct of accountants and tax advisers, and membership of any professional body is not mandatory. If competing professional bodies are not actively monitoring, investigating and applying sanctions to their members in cases like these, how effective is self-regulation in reality?
10th January update: ICAS has now acknowledged receipt of our complaint, and say it’s being considered by the Director of Investigations. We’ll provide a further update when we receive a substantive response.
|At no point since the creation of the company on 7th May 2020, was Douglas Barrowman registered as its Person with Significant Control (PSC). Initially, Mr. Anthony Page was named as the sole PSC and then on 11th May 2023, he was replaced in this role by Arthur John Lancaster. https://find-and-update.company-information.service.gov.uk/company/12597000/filing-history
|See ‘The PPE cover-up: Douglas Barrowman’s hidden ownership and the potentially criminal consequences’ https://www.taxpolicy.org.uk/2023/08/13/ppe_medpro/
|See BBC iPlayer episode first aired 17 December 2023. https://www.bbc.co.uk/iplayer/episode/m001v97h/michelle-mone-admits-she-lied-but-says-shes-a-scapegoat (23:48 onwards)
|ICAS Code of Ethics January 2022 onwards (earlier equivalents available) see https://www.icas.com/__data/assets/pdf_file/0010/616708/ICAS-Code-of-Ethics-Applicable-from-1-January-2022.pdf. Professional Conduct in Relation to Taxation Republished: 1 January 2023. S2.2 https://www.icas.com/__data/assets/pdf_file/0007/610288/Professional-Conduct-in-Relation-to-Taxation-2022-1.pdf
|D. Gadher and H Yorke. ‘Questions over who really owns PPE firm linked to Mone given £200m’ The Times (13/08/23) https://www.thetimes.co.uk/article/questions-over-who-really-owns-ppe-firm-linked-to-mone-given-200m-0t3vk5pbl N. Wilson. ‘Michelle Mone’s husband admits to financial interest in PPE Medpro.’ The National 15/05/23. https://www.thenational.scot/news/20140324.michelle-mones-husband-admits-financial-interest-ppe-medpro/ Business Matters. HMRC issues winding up petition against PPE firm linked to Tory peer Mone. Business Matters. 02/09/23 https://bmmagazine.co.uk/news/hmrc-issues-winding-up-petition-against-ppe-firm-linked-to-tory-peer-mone/ G. Couzens and N. Sommerlad. ‘Michelle Mone’s businessman husband faces jail if found guilty of Spanish tax charge’. The Mirror. https://www.mirror.co.uk/news/politics/michelle-mones-businessman-husband-faces-28752717