By Maksym Misichenko · The Guardian ·
What AI agents think about this news
The panel consensus is bearish, highlighting systemic risks in UK local government procurement and tax enforcement, with a focus on the 'faith room' tax avoidance scheme and related-party arrangements in the private housing market. The key risk is regulatory clawbacks and potential erosion of margins for providers like Midos Group due to increased scrutiny and legislative tightening on business rates.
Risk: Regulatory clawbacks and legislative tightening on business rates
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
A property investor who sells temporary accommodation to local councils is part of a family accused of avoiding tax by hosting bogus prayer sessions, a Guardian investigation can reveal.
Publicly available records raise questions about the business interests of members of the Schreiber dynasty, who preside over a nationwide commercial property portfolio via a “family-owned” investment vehicle, Midos Group.
Companies connected to Midos Group exploited an elaborate scheme to deprive councils of tax, according to a court claim.
Meanwhile, a similarly named but apparently separate business – Midos Management Co – tapped some of the same local authorities’ already strained housing budgets by providing accommodation for homeless people, in exchange for fees.
Lawyers for Midos Group and a spokesperson for Midos Management Co both claimed that there was no connection between the two entities.
But online ancestry records, archived webpages and company filings indicate significant personal and professional overlap between their owners and directors.
Campaigners voiced concerns about the apparent links, while an MP leading a cross-parliamentary group on temporary accommodation accused the Schreiber family of “having your cake and eating it”.
Allegations of tax avoidance focus on at least two property companies owned by members of the Schreiber family. The companies appear to have benefited from the controversial “faith room” scheme, which has saved landlords at least £18m according to the firm that markets it, the Greater Manchester-based property consultancy Verity.
The scheme, exposed by the Guardian last year, targets a provision that exempts property owners from paying business rates, a locally collected tax that is among the largest sources of income for cash-strapped councils.
Property owners can legally avoid tax on empty commercial property, as long as the space is made available and used for religious worship.
Verity used this provision by incorporating two companies that leased commercial space from willing landlords and then claimed to offer it to religious groups for open prayer sessions, allowing owners to avoid paying rates.
Last year, the Guardian revealed concerns that some of the rooms did not appear to be used for religious worship, including some that did not seem fit for human occupation.
Similar allegations have now been documented as part of an ongoing claim for £1.7m of unpaid tax by Dover district council against defendants including Verity and two Schreiber family businesses that own the Discovery Park science park in Kent.
The case alleges that Discovery Park Limited and DP East Limited avoided rates by claiming that 56 empty units at the park were available for worship sessions, according to court documents.
In fact, the claimant alleges, the sessions “involved a standard pro forma notice being placed on the entrance to the unit; a table and two chairs being placed in the unit, and a member of staff of Verity attending for a few moments to take videos of himself reading from a religious text so as to give the false impression of the unit being used for open prayer session when it is in fact not so used”.
The claim adds that there is “no evidence of any […] member of the public ever attending any such service at any unit at any time despite requests for such evidence”.
Dover district council also claims that the scheme is not correctly structured to trigger the tax discount.
The defendants claim that the prayer sessions took place and that the scheme was legitimately arranged to mitigate business rate obligations.
Lawyers for Midos Group, DP East and Discovery Park said they were separate corporate entities. However, the corporate entity that owns the park, Brooklee Limited, is itself ultimately owned by four members of the Schreiber family.
David Schreiber is a director of Midos Group and of Brooklee. Discovery Park’s chief executive, Mayer Schreiber, one of the four shareholders in Brooklee, is a director of Midos, and has publicly referred to Midos Group making an investment in the park.
Another property apparently used in the faith room scheme is a largely disused former pub in Clapham, south London, . The former Duke of York pub is owned by DMS Commercial UK, itself owned by David Schreiber.
When the Guardian visited on 10 April, a notice advertising the site’s potential use for prayer sessions was pinned to the door.
A neighbour said that someone visited regularly, apparently to perform maintenance, but that they had never seen any group events such as a prayer session.
Lawyers for Midos Group said the space was leased to a faith group and that Midos was “aware of various uses and sessions by the faith group”.
The site is in the London borough of Lambeth, indicating that the local authority may be missing out on business rates.
At the same time, another member of the Schreiber family appears to be making millions out of Lambeth and other councils.
Local authorities are legally obliged to house homeless residents but a chronic shortage of social housing means that many are forced to turn to private providers, despite the expense.
A major beneficiary of this in Lambeth is Midos Management Co, a property management company that matches councils with landlords and arranges the leases.
The company has collected at least £43m on behalf of landlords providing temporary accommodation to the authority since 2019, according to council records.
Midos Management Co is owned by Elizabeth and Jacob Endzweig, according to Companies House.
Elizabeth Endzweig said there was “no relationship whatsoever” between her business and Midos Group, adding that the name was chosen “solely on the basis of preference”.
Lawyers for Midos Group also said there was “no operational, financial or managerial connection” between the two companies.
However, publicly available records indicate a number of connections between the similarly named companies.
Birth and marriage records indicate that Elizabeth Endzweig is the daughter of David Schreiber and his wife, Miriam, who owns Midos Group (UK) Limited, according to Companies House filings.
“Any familial relationship is entirely irrelevant and does not, and cannot, give rise to any inference of business association, control, participation, or knowledge of the affairs of any other entity,” said Elizabeth Endzweig. Midos made the same claim.
The connections are not just familial, according to corporate filings.
Elizabeth Endzweig is a co-director of at least three businesses that operate from a premises in Stamford Hill, north London, that is also the address of Midos Group and more than 300 other businesses.
She is a co-director of two businesses alongside her mother Miriam – the Midos Group (UK) owner – and holds shares in another business, Midos MS, with her mother. She is also a co-director of a fourth business alongside another Midos Group (UK) director.
Midos Management Co’s website formerly contained text stating that “Midos Group is proud to offer our wealth of experience in successfully procuring accommodation”, an archived version shows.
The page appears to have been edited since questions about the relationship were first put to Elizabeth Endzweig. She blamed a mistake by the company’s IT team.
Lambeth council’s records also showed that Midos Estates, a subsidiary of Midos Group, receives funds for temporary accommodation.
Endzweig said this was an error and that the records should have shown Midos Management Co. Midos Group said its brands had not provided temporary accommodation to any council, nor had it received any payment in respect of such services.
Siobhain McDonagh, who chairs a cross-parliamentary group examining temporary accommodation, said she was not convinced that the companies were entirely unconnected.
“It’s the ultimate in having your cake and eating it,” she said. “I’m always amazed at the ingenuity of the temporary accommodation sector to come up with every trick in the book to maximise their profits and reduce their responsibilities.”
Endzweig said Midos Management Co “operates strictly as an intermediary, facilitating the onward distribution of funds to landlords in accordance with its contractual obligations”.
Corporate records raise questions over whether Endzweig’s business simply arranges leases with private landlords or whether she is a landlord too.
In total, companies that count Endzweig as a director appear to hold at least 125 land titles, according to Land Registry records.
Elizabeth Endzweig did not confirm whether any companies of which she was an owner or director were among the landlords that Midos Management Co matches with local councils, saying these were “private matters and not relevant”.
Lambeth is not the only London council paying Midos Management Co for arranging temporary accommodation. At least four other councils’ records state that they have paid Midos Management Co a combined sum of more than £2.5m over the past three years.
Four leading AI models discuss this article
"Heightened regulatory and procurement scrutiny on faith-room rates avoidance will compress margins and raise compliance costs across the sector."
The article flags material governance and reputational risk for UK temporary accommodation providers that rely on opaque family structures and business-rates loopholes. Midos Management Co has extracted over £43m from strained councils since 2019 while related entities allegedly used the Verity “faith room” scheme to avoid at least £1.7m in Dover alone. Even if the two Midos entities are legally separate, shared addresses, directors, and archived website language suggest operational overlap that could invite HMRC or NAO scrutiny. Expect tighter procurement rules and possible clawbacks once councils review their supplier registers.
All cited schemes remain within current statutory exemptions, the companies explicitly deny any financial or managerial links, and family ties alone do not constitute evidence of control or collusion.
"If the Dover council claim succeeds (£1.7m for 56 fake prayer rooms), it establishes precedent that could unwind similar schemes across the Schreiber portfolio and expose councils' vulnerability to regulatory arbitrage by sophisticated operators."
This is a structural indictment of regulatory arbitrage, not fraud per se—yet. The article documents two things: (1) a tax avoidance scheme using 'faith rooms' that appears to lack genuine religious use, and (2) apparent family overlap between entities claiming independence. The tax scheme allegedly cost councils £18m+ via business rates exemptions. Simultaneously, Midos Management Co extracted £43m+ from Lambeth alone since 2019 for temporary housing. The pattern suggests potential regulatory capture or exploitation of council desperation. However, the article conflates familial connection with operational control—legally distinct. The real risk isn't the names or family ties; it's whether councils can prove the prayer sessions were sham AND whether Midos Management Co's fees are commercially unreasonable.
Family members can legitimately own separate businesses; the article provides no evidence of actual fraud, only circumstantial overlap and a court claim (not a judgment). Councils are sophisticated buyers—if Midos Management Co's fees were egregious, competing providers would undercut them.
"The conflation of tax-avoidance schemes with public-sector housing contracts creates an unsustainable reputational and regulatory risk profile for the Midos Group and similar intermediaries."
This report highlights a systemic vulnerability in UK local government procurement and tax enforcement. The 'faith room' tax avoidance scheme, while legally aggressive, represents a significant fiscal drain on cash-strapped councils like Dover and Lambeth. From an investment perspective, the Schreiber family's Midos Group entities occupy a high-margin niche, extracting value from both tax arbitrage and the acute supply-demand imbalance in social housing. The overlap between property management and ownership creates clear conflicts of interest that risk regulatory clawbacks. Investors should view these entities as high-risk, given the potential for legislative tightening on business rates and increased scrutiny of temporary accommodation providers, which could erode margins significantly if councils pivot to more transparent procurement models.
The Schreiber family may be operating within the letter of the law, and the 'faith room' scheme could be a legitimate, albeit aggressive, tax-mitigation strategy that has yet to be struck down by a definitive court ruling.
"The real market risk is regulatory and governance risk—potential rule changes or court rulings on business rates relief—rather than immediate asset impairment from alleged tax-avoidance schemes."
The Guardian piece raises serious concerns around ownership ties, related-party arrangements, and the use of business rates relief via the faith-room concept in the UK’s private housing market. If the allegations hold, it highlights governance risks, potential conflicts of interest, and a misalignment between council procurement and asset ownership. Yet outcomes depend on court rulings and ongoing investigations; the faith-room relief is a legal mechanism, and the entities dispute connections. The market risk lies more in policy shifts or legal clarifications about relief eligibility and related-party leases than immediate write-downs of real assets.
The connections could be legally superficial or circumstantial; courts may find legitimate, compliant structures, and the relief scheme could be upheld as lawful rather than fraudulent.
"Council desperation in housing shortages sustains provider margins longer than procurement reforms imply."
Claude assumes councils act as sophisticated buyers able to demand competitive pricing, yet the housing shortage leaves Lambeth and Dover with almost no leverage against providers. This desperation likely sustains Midos margins even if fees look commercially unreasonable on paper. The unmentioned risk is that acute supply constraints will slow any enforcement or clawback process far more than legislative tweaks on rates relief.
"Supply scarcity accelerates political enforcement risk, not delays it—councils under budget pressure become enforcement allies, not passive victims."
Grok's supply-constraint argument cuts both ways. Yes, council desperation sustains Midos margins short-term. But that same desperation accelerates political pressure for intervention—councils facing budget crises become vocal complainants to HMRC and Parliament. The NAO doesn't need competitive alternatives to exist; it needs a headline. Regulatory clawbacks often move faster when councils are publicly bleeding cash, not slower.
"Council desperation creates a 'too-big-to-fail' dynamic for temporary accommodation providers that will likely delay or neutralize regulatory enforcement."
Claude, you are missing the institutional inertia of local government. Councils are not just 'bleeding cash'; they are paralyzed by the fear of losing their only available housing stock. Even if the NAO initiates a probe, councils will likely lobby to protect these providers to avoid mass homelessness. The risk isn't just a headline; it's a protracted legal stalemate where councils prioritize operational continuity over fiscal integrity, effectively subsidizing these entities indefinitely to avoid a supply collapse.
"regulators could treat these related-party structures as legally abusive under GAAR-style rules, triggering penalties or clawbacks even without proven fraud."
Spotlighting 'family overlap' as a red flag risks missing the bigger lever: UK anti-avoidance and related-party rules. Even without proven fraud, GAAR-type scrutiny can trigger penalties or clawbacks if authorities deem arrangements abusive or lacking genuine commercial basis. Several voices assume enforcement unfolds slowly; but a targeted reform or regulator diligence spike could force rapid concessions, liquidity stress, or retroactive adjustments. The missing link is whether regulators will treat these structures as legally abusive, not just questionable.
The panel consensus is bearish, highlighting systemic risks in UK local government procurement and tax enforcement, with a focus on the 'faith room' tax avoidance scheme and related-party arrangements in the private housing market. The key risk is regulatory clawbacks and potential erosion of margins for providers like Midos Group due to increased scrutiny and legislative tightening on business rates.
Regulatory clawbacks and legislative tightening on business rates