Finance01 October, 20262 min read
Meg Hillier Presses HMRC Over Manchester City Tax Implications After Premier League Ruling
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Treasury Committee chair Meg Hillier asks HMRC to report tax implications of City ruling. Independent commission found Manchester City breached Premier League financial rules between 2009-10 and 2017-18.
HMRC questioned on City
The Treasury Committee chair Meg Hillier wrote to HMRC Permanent Secretary JP Marks after the Premier League’s independent commission ruling found Manchester City guilty of “well over 100 individual breaches of the Premier League Rules across the course of many seasons”. Hillier asked whether HMRC was aware of the commission’s findings and whether HMRC had requested or been provided with an unredacted copy of the report.
Hillier also pressed HMRC for an overview of “current HMRC work around football clubs” and asked what common issues around taxation, including “the taxation of remuneration,” HMRC had found in clubs’ practices. HMRC can unpick a company’s tax returns and reject contrived transactions that reduce taxable income, and HMRC can apply financial penalties for underpaid taxes as a result of false statements, according to the account of the committee’s concerns.
Sham contracts and £12m
The Premier League said Manchester City used “sham” commercial contracts to inflate revenue and understate costs by more than £900 million over nearly a decade, and the independent commission also found City “utilised devices” to “disguise the true extent of certain club liabilities”. Tax Policy Associates argued that the commission’s findings and leaked documents point to “£12m in unpaid UK tax,” saying it was linked to Roberto Mancini’s payments being routed through a sham consultancy.
Tax Policy Associates wrote that it “don’t know whether HMRC has commenced an investigation into these arrangements,” and it said there was “no sign of any settlement payments in Manchester City’s accounts”. Manchester City continued to deny wrongdoing and signaled an intent to lodge an appeal against the commission’s findings before Friday’s deadline, as the committee’s tax questions broadened the fallout beyond football rules.
Appeal, deadlines, and risk
Manchester City’s appeal plans set a tight timetable, with the club expected to lodge an appeal before Friday’s deadline and with the Wales Online account saying City had until October 2 to submit an appeal. The Treasury Committee’s letter sought reassurance that HMRC was “seized of the importance” of the case and asked for an overview of HMRC work around football clubs, including “any common issues around taxation (including the taxation of remuneration)”.
The BBC account said the independent commission found City guilty of all charges relating to breaches of Premier League financial regulations between the 2009-10 and 2017-18 seasons, and it described City as having artificially inflated revenue through “sham” sponsorship agreements. The Tax Policy Associates report warned that the consequences could include “a much larger tax bill and a criminal investigation,” while Manchester City maintained that it was innocent and said the commission’s decision contained “clear material errors, of law, principle and fact, and is unsafe”.