Newcastle and West Ham raided in HMRC tax fraud investigation

8th May 2017

Footballers and the teams they play for tend to have a bad reputation, not least in this country. And while much of it is warranted (Joey Barton, we’re looking at you) it would be fair to say that much of the criticism is unjustified and largely because so many professionals earn a truly astonishing amount of money for playing the sport. However, one particular transgression that the footballing world – outside of Barcelona – has largely been able to sidestep is tax fraud. Until now.

Newcastle and West Ham raided

Early on Wednesday 26th April the offices of both Newcastle and West Ham United were raided with Chelsea FC also confirming that they were asked to provide information as part of a wide ranging investigation into suspected criminal tax fraud. Newcastle’s managing director, Lee Charnley was one of several men arrested, just two days after his club enjoyed promotion to the Premier League.

The tax authority released a statement saying:

“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 and have made arrests and several locations have been searched in France.”

It was later revealed that the investigation centred around suspicions of tax fraud and evasion committed in “several transfers of footballers from French clubs to clubs playing in the Premier League”, suggesting that illicit payments to players, agents and third parties enabled the clubs to evade paying appropriate levels of income tax and national insurance.

Public attitudes changing

It would be fair to say that public attitudes towards tax evasion have become more negative in recent years and the Premier League has promoted an Ernst & Young study which found that it contributed £2.4bn in tax during the 2013/14 season in response to allegations of excessive pay and unfair ticket prices. However the tax authority is known to have been conducting major investigations into tax affairs of football teams for a number of years, suggesting that it believes that money is being hidden illegally.

While it’s unlikely that any contractors you place will be performing in the Premier League or Ligue 1, it does highlight the fact that even colossal organisations like leading football clubs aren’t safe from the investigations of HMRC. And while these two clubs are likely to be able to handle the fines that could be coming their way, not many agencies would have this capacity. If you’re at all unsure of your status when placing specialists overseas, ensure you partner with a specialist before it’s too late.

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