Earlier this morning, in a coordinated effort, roughly 50 HMRC officers raided the offices at London Stadium under the guise of a fraud investigation. While accurate details of the investigation have been scarce, news and opinion is flying in. In addition to West Ham United, recently promoted Newcastle saw officers at their doors, with executive Lee Charnley arrested. Chelsea failed to be raided, however, they have made a statement saying HMRC asked for specific documents to which they provided.
Andy Wood, a director at Enterprise Tax Consultants, explains his view on the matter, as well as some potential motivation behind the coordinated HMRC efforts.
Wood told PA Sport:
“In my opinion, HMRC is being very bold in describing this as fraud from the outset, as that is a criminal offence and potentially carries severe penalties for individuals whom it can prove have been guilty of such activity.
“However, the Revenue has not been shy of late in making clear its desire to tackle high-profile figures and companies whom it believes are avoiding or evading tax, partly because of the deterrent effect.
“In football, that has been certainly the case following HMRC’s clamping down on the use of employee benefit trusts of the sort which were at the heart of Rangers’ liquidation in 2012 and the recent hearing in the Supreme Court.
“As well as HMRC getting tougher with those even suspected of impropriety, the investigation involving Newcastle and West Ham provides yet more evidence of how its international reach in trying to bring tax evaders to book is continually being increased by co-operation with foreign tax authorities.”
Wood is of course referring to the image rights clause that have been used in player contracts. Jennie Granger, head of compliance at the HMRC, warned clubs back in December they will be taking a hard look at image rights and taxation. Earnings from images are taxed differently than other streams of revenue which allow for more profit.
WATCH: @NUFC and @WestHamUtd raided by HMRC officers on Wednesday morning: https://t.co/sAJQMBLeK8 #SSNHQ https://t.co/JopAmuvlJN— Sky Sports News HQ (@SkySportsNewsHQ) April 26, 2017
With that in mind, no club should be outright shocked when HMRC comes knocking at the door. Everyone spoken today seems to have been linked to dealing with French club Marseille, who is run by disgraced LA Dodgers owner, Frank McCourt.