The chair of the Treasury Committee has written to HMRC over the potential tax implications of Manchester City’s guilty verdict, asking the department to confirm it is “seized of the importance” of the case, according to new reports.
Ayyoub Bouaddi and others in the Manchester City dressing room will have questions for the board.More Videos
Manchester City can add the taxman to the growing list of parties taking a keen interest in this week’s momentous verdict.
Days after an independent commission ruled against the club over more than 100 charges of financial rulebreaking, the case has landed on the radar of Parliament’s tax watchdog, with a senior MP now pressing HMRC on what the findings might mean for the Exchequer.
Of course, this is a turn that pushes the saga into unfamiliar territory. Where the argument so far has largely concerned sporting sanctions, the questions being asked now are about money, tax and whether the commission’s conclusions could lead to punishment beyond the rules of the various competitions City are involved in.
Manchester City have issued a formal statement in response to the Premier League publishing an independent commission's finding that the club breached league's financial rules between 2009 and 2018.cityxtra.co.ukMan City Respond to Independent Commission Guilty Verdict on Premier League Financial Rule Breaches
Manchester City have issued a formal statement in response to the Premier League publishing an independent commission's finding that the club breached league's financial rules between 2009 and 2018.
What the Letter Asks
According to The Times’ Matt Lawton, Dame Meg Hillier - who chairs the Treasury Committee - has written to HMRC’s permanent secretary JP Marks over the potential tax fallout from the Premier League’s case against Manchester City.
In the letter, Hillier seeks assurances that HMRC is “seized of the importance” of the case, before putting a series of questions to Marks.
Among them is whether the department has been made aware of the commission’s findings, and whether it has asked to see a full, unredacted version of the report.
The committee chair goes further still, requesting an overview of how the department taxes player and staff pay, and of any wider tax avoidance that might exist across football clubs.
Why HMRC is Interested
The intervention follows the publication earlier this week of the Premier League’s report, which concluded that “well over 100 individual breaches of the Premier League Rules across the course of many seasons” had taken place.
The relevance to HMRC lies in the nature of those alleged breaches. Among the charges City were found to have committed were failures relating to the remuneration of players and coaches, an area in which how money is structured and paid can carry significant tax consequences.
By raising how player pay is taxed specifically, Hillier is pointing to the possibility that the commission’s conclusions may indicate City have dodged taxes - allegations that, it should be stressed, City strenuously deny.
It is a line of inquiry that could, in time, spark an entirely separate battle to the ones City are already fighting on the pitch and in the appeal process.
A Case That Keeps Widening
This statement is yet another example of just how far the ramifications of the verdict are reaching for the club. In the space of a week, the ruling has moved from the back pages to the desks of police forces, government spokespeople and now a parliamentary committee scrutinising the tax authorities.
Meanwhile, some of City’s highest profile sponsors appear to be considering entering the fray in a tangled web of conflicting parties that is only likely to get messier.
City have confirmed they will appeal the verdict, which they have branded “unsafe”. No tax investigation has been announced, and Hillier’s letter is essentially a request for information rather than evidence of any new inquiry beginning.
Even so, the questions now being asked in Westminster underline a growing reality for Manchester City. Their appeal against the Premier League verdict seeks to stave off points deductions and transfer bans, but now a very different set of answers are being sought in Parliament, in the courts and, potentially, by the taxman too.