The Government claim

On 28 July 2025, in Freedom of Information response #4764113, the Department for Enterprise stated:

The Department for Enterprise has not provided financial assistance, grants, or relocation incentives to companies known or suspected to be involved in tax avoidance or evasion schemes.

Freedom of Information Response #4764113, page 2

The facts

On 18 August 2020, the Isle of Man Value Added Tax and Duties Tribunal found in part:

254 …The documentation demonstrates that IPS was intended to operate as an intermediary company allowing contractors and recruitment companies to avoid certain tax and regulatory issues. Whether or not it actually achieved those aims is not relevant. I am satisfied that IPS was marketed to contractors as providing the tax benefits associated with a personal service company but with a reduction of the administrative burden…

THE ISLE OF MAN VALUE ADDED TAX AND DUTIES TRIBUNAL, Appeal number:TC/2019/00182

Further, on 20 July 2021, the High Court of Justice of the Isle of Man set out the background facts as determined by the IOM VAT and Duties Tribunal:

8. IPS was incorporated on 6 September 2004… with the benefit of a grant of £5,000 from the Isle of Man Government, obtained with the assistance [of] an advisor called Ian Montcrief-Scott.

The High Court of Justice of the Isle of Man, Staff of Government (Appeal Division), Income Plus Services Limited and Customs and Excise Division Isle of Man Treasury, paragraph 8

Further, on 22 May 2025, the Isle of Man Financial Services Authority made a public statement which said in part:

1.3 Following an inspection of IPSL by the Authority…identified a number of contraventions by IPSL in relation to the Anti-Money Laundering and Countering the Financing of Terrorism Code 2019 (the “Code”).

Public Statement Concerning the Imposition of a Civil Penalty on Income Plus Services Limited (‘IPSL’)

Summary

The Isle of Man Government did provide financial assistance and/or a grant to IPS Limited, and the High Court found that IPS Limited was intended to allow contractors to avoid certain tax issues as described above.

However, it’s important to note:

• The Tribunal stated there was “no question of applying principles of abuse of law or sham”;
• The case was about VAT treatment, not the legitimacy of the tax planning structure;
• The arrangement operated for many years without being challenged as illegitimate tax avoidance.

Whilst not ruled as illegal or abusive, the evidence strongly suggests IPS was primarily a vehicle for obtaining tax advantages through an artificial intermediary structure, which are often perceived as hallmarks of tax avoidance schemes.

Source Documents