01118-24 Barrowman v Daily Mail

Summary of Complaint

1. Douglas Barrowman complained to the Independent Press Standards Organisation that the Daily Mail breached Clause 1 (Accuracy) of the Editors’ Code of Practice in an article headlined “How Baroness Bra's (equally flashy) husband made £300m from dubious tax-avoidance schemes that ruined thousands and led to two suicides”, published on 27 January 2024.

2. The article – which appeared across pages 28 and 29 - said the complainant was “behind a company that, for most of the 2010s, sold flawed tax schemes to mostly middle-class workers” and that “when [his] schemes eventually unravelled, clients were left facing huge tax bills”. It said that people who used the scheme “were told that his firm could help them legally avoid paying hundreds of millions of pounds to the Inland Revenue. In fact, that turned out to be untrue.” It also said that, when the scheme “unravelled”, “clients were left facing huge tax bills”, and many were “financially ruined and at least two former customers of his firms have since committed suicide”.

3. The article also stated that “around ten suicides are linked to the HMRC clampdown [into such schemes], according to evidence shared in a recent House of Commons debate. Two were former clients of Barrowman”. It then stated: “HMRC did not believe the loan structures were remotely legal. It instead regarded them as ‘disguised remuneration schemes’ and — after several years warning about an impending clampdown — in 2017 announced former clients would be required to pay taxes on all money they had been loaned.” It quoted an MP “who said the affair had 'frightening parallels' with the Post Office scandal, arguing that over-zealous enforcement by HMRC officials has left people facing 'unaffordable demands' which led to a 'risk of further suicides’”.

4. The article went on to report that, after clients of the complainant’s firm “started getting large bills from HMRC, they were contacted by a new company called Vanquish”, which offered “to help them sidestep the retrospective tax charges”. However, “the scheme didn’t actually work, because any claim that the loan had been fully repaid was, self-evidently, untrue. Clients of Vanquish were therefore handing over cash for no good reason.” It reported that “Vanquish first came to public attention in 2019. At the time, [the complainant’s] lawyers told the Sunday Times, which was investigating the dubious scheme, that he denied having 'any involvement or interest in Vanquish'”. It went on to state that:

“lawyers also told BBC Radio’s File on four that neither Barrowman nor his Knox group of companies have at any time owned or controlled Vanquish. However, electronic records obtained by the BBC, and made public last week, cast doubt on that statement. They show, among other things, that AML and Vanquish shared several directors, while data from emails sent by the two firms reveal they were sent from the same IP address, suggesting the messages were sent from the same computer, at Barrowman's company HQ on the Isle of Man. Barrowman has since issued a statement saying he 'denies all and any allegations of dishonesty, misconduct and wrongdoing', telling me none of his firms has 'ever done or participated in anything which could be construed as criminal or fraudulent, as was recklessly reported in recent media'’.

5. The article also said that a spokesman for the complainant had stated that he “’was neither a director, a shareholder nor a decision maker in Vanquish. He had no personal involvement in the company’”. It also said that, “however, the same PR man seems to be also representing Vanquish”.

6. The article also described the complainant as a “roly-poly Scottish businessman” with “cocktail-sausage fingers” and “recently bleached teeth”.

7. The article also appeared online in substantially the same format under the headline, “How Baroness Bra's (equally flashy) husband made £300 MILLION from dubious tax-avoidance schemes that ruined thousands and led to two suicides.”

8. The complainant said the headline’s claim the “tax avoidance schemes” he profited from “led to two suicides” was inaccurate in breach of Clause 1. He said the headline’s allegation that he or his company were responsible for the deaths constituted a serious allegation for which there was no basis in the main body of the article or otherwise. He said it was only due to the recent changes introduced by the Finance Act 2017, designed to “clampdown” on these tax schemes, that led to scheme subscribers facing financial difficulties and, in some cases, dying by suicide. He said this was shown by the quote from the MP – included in the article – which referenced “overzealous enforcement by HMRC official[s] [which] ha[d] left people facing ‘unaffordable demands’ which lead to a ‘risk of further suicides’”. He also noted the article acknowledged “around ten suicides [were] linked to the HMRC clampdown, according to evidence shared in a recent House of Commons debate”.

9. The complainant said that the article, in reporting “people were told that [the complainant’s] firm could help them legally avoid paying hundreds of millions of pounds to the Inland Revenue […] that turned out to be untrue” created the inaccurate impression he had profited from criminal conduct. He also said this impression was heightened by the descriptions of the schemes as “flawed” and “dubious”. He disputed this, saying use of the schemes was - prior to the Finance Act 2017 - widespread, and they were legally effective in avoiding liability for income and national insurance taxes.

10. The complainant disputed that he was connected to Vanquish, and said the article gave the inaccurate impression he was involved with the organisation. The complainant also said it was inaccurate to report “the scheme didn't actually work, because any claim that the loan had been fully repaid was, self-evidently, untrue. Clients of Vanquish were therefore handing over cash for no good reason.” He said this implied the attempt by Vanquish to assist customers in avoiding tax liability did not work, and that Vanquish always knew it would not work. He argued this gave the impression the company caused customers to commit fraud, without caring about the consequences.

11. The complainant said the article’s description of him as “roly-poly”, with “cocktail-sausage fingers” and “recently bleached teeth” was “clearly designed to mock and humiliate”, in breach of Clause 1.

12. The publication did not accept it was inaccurate to report the scheme led to two suicides. It said was not in dispute that two people who had used the scheme were left financially ruined – after HMRC declared the retrospective use of such schemes illegal in 2017 – and then took their own lives. It said the article and headline did not say that the scheme was the sole reason for the suicides, but that it led to the deaths, which it did. It argued that, while the complainant said it was the attempts by HMRC to recoup the unpaid tax which caused the suicides, HMRC would not have been recouping the tax if it had not been avoided via the complainant’s scheme. It said this had been widely reported without challenge from the complainant, who the publication said was proactive about protecting his reputation. To support its position, it cited three articles which appeared in other publications on the link between the schemes, “financial ruin” and suicides, and an investigation from a tax expert. It also supplied a tweet from an APPG representing victims of the schemes which connected the suicides to the complainant.

13. It also noted that an MP had stated as follows during parliament, as recorded by Hansard:

“Seven needless deaths; seven families tragically left to deal with the consequences, and yet companies such as AML that have promoted the schemes are getting away scot-free. AML and its director, Doug Barrowman, appear to have moved away with no consequences whatever. In fact, they are boasting that HMRC is not pursuing them for any assets or unpaid taxes. Will the Minister detail the efforts that are being taken against such companies, which have caused so much pain and tragedy?”

14. The publication did not accept that there were any inaccuracies regarding its reporting on Vanquish. It said it had set out the basis for the link between the complainant and Vanquish, and also included the complainant’s denial of the link. In response to the allegations that clients were “handing over cash for no good reason” to Vanquish, the publication said it was “surprised” the complainant was concerned about this alleged inaccuracy, given he had strenuously publicly denied his involvement with the company. It also noted the complainant’s representative had been happy to comment on matters relating to Vanquish prior to publication. It added that it was not inaccurate to state clients were “handing over money for no good reason”, where the scheme did not work. It said if it had worked, the loans would have been fully repaid by the organisation and clients would not have been penalised by HMRC.

15. The publication did not accept that the complainant’s concerns about the article’s allegedly insulting description of him engaged the Code.

16. During IPSO’s investigation, the complainant confirmed that he was not acting on behalf of Vanquish in making the complaint.

Relevant Clause Provisions

Clause 1 (Accuracy)

i) The Press must take care not to publish inaccurate, misleading or distorted information or images, including headlines not supported by the text.

ii) A significant inaccuracy, misleading statement or distortion must be corrected, promptly and with due prominence, and — where appropriate — an apology published. In cases involving IPSO, due prominence should be as required by the regulator.

iii) A fair opportunity to reply to significant inaccuracies should be given, when reasonably called for.

iv) The Press, while free to editorialise and campaign, must distinguish clearly between comment, conjecture and fact.

Relevant IPSO Regulations

8. The Regulator may, but is not obliged to, consider complaints: (a) from any person who has been personally and directly affected by the alleged breach of the Editors' Code; or (b) where an alleged breach of the Editors' Code is significant and there is substantial public interest in the Regulator considering the complaint, from a representative group affected by the alleged breach; or (c) from a third party seeking to correct a significant inaccuracy of published information. In the case of third party complaints the position of the party most closely involved should be taken into account.

Findings of the Committee

17. The Committee first considered whether it was inaccurate to report the complainant’s “schemes” had led to two suicides. The complainant’s position was that the deaths came about as a consequence of HMRC’s conduct in recouping the funds, rather than because of the scheme itself or his actions. It was not in dispute that two individuals who had taken their own lives had used the scheme, that HMRC had taken steps to recoup the unpaid tax-money from individuals who had used the scheme, and this had been referred to during parliament as a factor in them taking their own lives.

18. While the Committee noted the complainant disputed that he was responsible for the deaths of these individuals, this was not what the article claimed – it simply reported the schemes had “led to” two suicides, a phrase which did not, in itself, apportion responsibility. Where the money was recouped by HMRC as a consequence of the two individuals’ participation in the scheme, it was not inaccurate to link the schemes to the death in the manner done so by the article. There was no breach of the Code on this point.

19. The Committee next considered whether the article had inaccurately implied the complainant had knowingly acted illegally in selling the schemes, given that the schemes were described within the article as “dubious” and “flawed”. Given HMRC had retrospectively declared such schemes illegal in 2017, which – it was not disputed – had caused financial hardship and severe distress, there was a reasonable basis for characterising the schemes as “dubious” and “flawed”. Additionally, it found the article made clear the exact chronology of the decision by HMCR to recoup the money: it did not state the scheme had been illegal while being sold by the complainant, but that they had ultimately “turned out” to be illegal, and that this decision had been made in 2017. As such, there was no breach of Clause 1 on this point.

20. The Committee then considered the article’s reporting of the complainant’s alleged connection with Vanquish. It noted that the article made clear that the complainant strenuously denied any involvement with the company. Notwithstanding this, the publication was entitled to question to what extent the complainant was involved with the organisation, provided the complainant’s denial of the connection was clearly set out in the article and in circumstances where the basis for the link – reporting by other media organisations – was clearly set out. There was no breach of Clause 1 on this point.

21. The Committee turned to the complainant’s concerns about whether clients of Vanquish had been “handing over cash for no good reason”. In this case, the alleged inaccuracy related to Vanquish. In circumstances where the complainant was not complaining on behalf of the organisation, the complaint was a third-party complaint, which IPSO may, but is not obliged, to consider. In this instance, having taken the position of Vanquish into account, the Committee considered it was not able to make a finding on this point of complaint without the direct involvement of Vanquish itself – given the complaint related to concerns that its behaviour as an organisation had been inaccurately reported. Absent confirmation that the complainant was acting on Vanquish’s behalf, the Committee declined to consider this aspect of the complaint further.

22. The Committee appreciated the complainant found the article’s description of his physical appearance to be insulting. However, Clause 1 does not address issues of offence. Newspapers are free to publish what they choose provided the Code is not otherwise breached. There was, therefore, no breach of Clause 1 on this point.

Conclusions

23. The complaint was not upheld.

Remedial action required

24. N/A

Date complaint received: 12/03/2024

Date complaint concluded by IPSO: 29/08/2024