PPE Medpro Linked to Michelle Mone Faces £39 Million Tax Bill

A company associated with former Conservative peer Michelle Mone is facing a significant financial crisis, owing £39 million in unpaid taxes. This revelation comes in the wake of PPE Medpro’s recent administration announcement, linked to allegations of supplying unusable personal protective equipment (PPE) during the COVID-19 pandemic.

On September 30, 2023, PPE Medpro, owned by Mone’s husband, Doug Barrowman, was placed into administration just prior to a critical high court ruling. Mrs. Justice Cockerill determined that the company had breached its contract with the Department of Health and Social Care (DHSC), which had awarded it a contract in June 2020 to supply 25 million sterile surgical gowns. The court mandated that the firm repay the full £122 million it received for the contract.

The administrators, Forvis Mazars, submitted a preliminary statement to Companies House on October 30, 2023, indicating that the total owed to the DHSC stands at £148 million. This amount reflects the original contract value plus accrued interest due to late payments, currently accumulating at an annual rate of 8%.

In addition to the DHSC debt, the document reveals that HM Revenue and Customs (HMRC) is owed £39 million in unpaid taxes. This disclosure marks the first public acknowledgment of such a substantial tax demand facing PPE Medpro, as HMRC typically maintains confidentiality regarding tax matters. While the specifics of the unpaid tax remain unclear, it is presumed to be related to corporation tax on the company’s profits, as no liabilities were noted for employees’ PAYE, national insurance contributions, or VAT.

PPE Medpro’s total debts now amount to £188 million, which includes the £148 million owed to the DHSC, the £39 million in unpaid taxes, and additional debts totaling £1.2 million to various parties, including the company’s legal representatives.

Background and Legal Proceedings

The DHSC awarded PPE Medpro a total of £203 million for contracts that included both the gowns and an additional contract for face masks worth £80 million. These contracts were processed through a controversial “VIP lane,” which expedited contracts for suppliers with political connections during the pandemic. Mone, appointed as a Conservative member of the House of Lords by David Cameron in 2015, has long faced scrutiny regarding her association with the company.

For years, Mone and Barrowman denied their involvement with PPE Medpro, despite evidence to the contrary. A November 2022 report by the Guardian revealed that Barrowman had received at least £65 million from PPE Medpro’s profits, subsequently transferring £29 million to an offshore trust intended to benefit Mone and their three children. Following public outcry, the DHSC initiated legal action against PPE Medpro in December 2022.

After a lengthy trial at the high court, Mrs. Justice Cockerill concluded that the gowns supplied by PPE Medpro were not compliant with necessary legal and regulatory standards. The products, manufactured in China, lacked the required certification to be deemed sterile.

In a December 2023 interview with the BBC, Mone acknowledged misrepresentations to the media and confirmed both she and Barrowman were involved in the company. Barrowman admitted to receiving £60 million from the company and acknowledged transferring funds to the offshore trust.

Challenges Ahead for Recovery

Following the missed repayment deadline of October 15, 2023, Health Secretary Wes Streeting stated, “We will pursue PPE Medpro with everything we’ve got to get these funds back where they belong – in our NHS.” However, the government faces significant legal challenges in recovering funds, as PPE Medpro has declared no remaining assets and is currently in administration.

Despite these hurdles, the administrators have indicated that they may attempt to recover funds through legal claims against unnamed “third parties.” The unfolding situation raises critical questions about the management of public funds and the accountability of private companies involved in government contracts during a national emergency.