Newcastle United and West Ham United Football Club’s offices have been raided with 180 officers from the UK’s tax authorities swooping on locations and individuals in both the UK and France.
Several men working in professional football have been arrested in the raids confirmed by HM Revenue and Customs (HMRC) as officers also seized computers, mobile phones and paperwork, according to various reports, including one in The Times.
Similar raids have taken place in France as part of what was clearly a co-ordinated plan with French authorities and arrests have been made. Newcastle United Football Club’s managing director Lee Charnley, is, according to the reports, one of the individuals that has been arrested with the others believed to be mainly football agents.
Newcastle United manager Rafa Benítez was said to be “shocked” to see officers at Newcastle’s training ground, according to according to one source quoted in The Times, when he arrived at the club’s Longbenton training centre to see officers from HMRC there.
It is understood that HMRC officers arrived at the home of Charnley, who earns £150,000 a year at the club, in north Newcastle yesterday evening. Raids then took place at Newcastle’s offices at St James’ Park and the training ground early today.
Around 50 officers descended on the Olympic Stadium in London, pictured above, at 8am with warrants to search West Ham’s offices and access computer records.
A statement from HMRC confirmed the raid, although chose not to officially name the individuals or the clubs involved at this stage.
Suspected £5m tax fraud
The HMRC statement said: “HMRC has arrested several men working within the professional football industry for a suspected £5m income tax and National Insurance fraud.
“One hundred and eighty HMRC officers have been deployed across the UK and France today. Investigators have searched a number of premises in the north east and south east of England and arrested the men and also seized business records, financial records, computers and mobile phones.
“The French authorities are assisting the UK investigation, have made arrests and several locations have been searched in France.
“This criminal investigation sends a clear message that, whoever you are, if you commit tax fraud you can expect to face the consequences. As this is an ongoing investigation HMRC is unable to provide any further detail at this time,” the statement said.
It is understood the HMRC investigations concern transfers between English and French clubs, image-rights payments and payments to football agents. Newcastle United, who celebrated promotion to the Premier League on Monday evening have recruited many players from France in recent years. West Ham have done deals involving at least five players to and from French clubs since the 2012-13 season.
As reported in numerous stories on International Investment, footballers such as Lionel Messi, Cristiano Ronaldo, Neymar and Wayne Rooney and managers such as Jose Mourinho, have been investigated by UK and Spanish tax officials in relation to offshore investments in the last 12 months.
However the scale of this operation will send shockwaves through world football.
More HMRC visits
In April, HMRC said that it will visit all English Premier League, Championship and Scottish Premier League clubs in the next three years to review payments made to players. Also, in January this year, the Parliamentary Public Accounts Committee revealed that the HMRC was investigating 43 footballers, eight agents and 12 clubs over tax paid on image rights income. However it is not clear at this stage if the raids are related to that investigation.
The committee’s report stated that the HMRC had a team of officers looking at footballers potentially receiving more of their income via image rights than they should to avoid tax.
It said: “HMRC told us that it has a specialist team looking at the potential abuse of the rules relating to image rights, which it described as the most significant tax risk amongst footballers.
“The rules allow income for image rights to be treated as a separate revenue stream. Particularly when combined with ‘non-dom’ status, this creates an incentive for the individual to maximise the proportion of income that is deemed to be for image rights in order to reduce their tax liability.
“HMRC told us that it has open enquiries about image rights on 43 footballers, eight agents and 12 clubs. We were appalled to hear that not all football clubs are providing HMRC with data under a voluntary agreement struck with the English Premier League.”