A property investor supplying temporary accommodation to councils is part of a family accused of avoiding tax through bogus prayer sessions, a Guardian investigation has found. The Schreiber dynasty controls a nationwide commercial property portfolio via Midos Group, which is linked to an elaborate scheme to deprive councils of tax, according to a court claim.
Meanwhile, Midos Management Co, a similarly named but apparently separate business, provides housing for homeless people to some of the same local authorities. Lawyers for Midos Group and a spokesperson for Midos Management Co deny any connection, but online records and company filings show significant personal and professional overlap between their owners and directors.
The tax avoidance allegations centre on the 'faith room' scheme, which has saved landlords at least £18m according to Verity, the firm that markets it. The scheme exploits a provision exempting property owners from business rates if commercial space is used for religious worship. Verity incorporates companies that lease space and claim to offer it for open prayer sessions, allowing owners to avoid tax.
Dover District Council is suing Verity and two Schreiber family businesses for £1.7m in unpaid tax, alleging that 56 empty units at Discovery Park science park were falsely claimed to be used for worship. The council says sessions involved a pro forma notice, a table and chairs, and a staff member reading a religious text for a few moments, with no evidence of public attendance. The defendants argue the scheme was legitimate.
Another property used in the scheme is a former pub in Clapham, owned by David Schreiber. Campaigners and an MP have expressed concern about the apparent links between the tax avoidance and homeless housing operations.
