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Newcastle United charged with tax fraud over player transfers

By Tony Attwood

Goodness knows how many police raids, tax fraud allegations, court cases, questions about contractual clauses and the like we’ve covered in the nearly 10 years we’ve been running, but it has been quite a few.  Spanish football has been rife with scandals, but there has been some activity in the UK too.   And they have kept on rolling along.

You might recall that on April 26 this year when trying to prepare our match preview for the Leicester game we were rudely interrupted by the news that the fraud squad was crawling all over Newcastle United and West Ham United.  We had to be careful of course because clubs can be litigious if they want to, and we were just going on stories doing the rounds.

It was said at the time that 180 officers in the UK and France were involved and now it appears that they went round and round and round.  Newcastle United challenged the legality of the search warrants stating that in their view there were no reasonable grounds for believing the club had committed tax fraud.

Now we’ve seen enough of these to know that irregularities are rife in football – you only have to follow Scottish football to know that the previous Rangers club (not this one you understand, the one that was but isn’t no more) were guilty of the most outrageous manipulation of the tax laws – something that resulted in no penalties against the club since by the time the court decided who was guilty, Rangers had been wound up, relegated to the fourth tier and climbed its way back up the league.

Whether the Newcastle and West Ham allegations go the same way we shall see over time.  HMRC (the tax collectors within the United Kingdom) have now stated that Newcastle have “systematically abused the tax system” with the use of “sham” contracts.  It all rings bells.

The transfers of  Demba Ba, Moussa Sissoko, Papiss Cissé, Sylvain Marveaux and Davide Santon are under consideration following the dawn raids that were reported previously.

Of special interest is Ba’s free transfer from West Ham United, and these particularly involve the activities of an agent called Simon Stainrod who was paid lots of money.  It is said that the money went via a law firm (which is very naughty) to various companies in Enfield, France and Panama (a country in which David Cameron the ex-PM of Britain, had investments).

The allegation is that the movement of money was not only against FA regulations and not properly declared to the tax authorities, but also fully known about by Newcastle.   HMRC suggest that Newcastle and Ba evaded income tax through the arrangement, to the tune of about £1.2m.

The HMRC man, a Mr Griffiths, said, “I believe that the contractual arrangements are a sham and do not reflect what actually happened.  The club’s agents passed on the vast majority of their fees to other agents acting for the players or to associates of the players.”   He added that Newcastle United then got a bit greedy (actually that’s my phrase not HMRC’s) by then claiming back the VAT they claimed they had paid on fees for Stainrod’s services!

So you (allegedly) commit a fraud and then (allegedly) claim back the VAT on the deal.  Nice one.

But there is more fun to come because the VAT-man said that this approach was “common across many of NUFC’s player transfer dealings”.  Apparently HMRC are also having a look at Ba’s transfer to Chelsea in 2013 and an awful lot more.  If found guilty on all counts Newcastle could end up going into liquidation.

It has also emerged from HMRC that Newcastle United were subject to a tax investigation in 2011-12 and it is now being suggested that Newcastle did not fully declare all the relevant correspondence at the time.  As a result HMRC are now taking the view that all payments made by the club to agents should be investigated as they were all potentially part of the same approach which would mean criminal proceedings in each and every case.

HMRC said it was, “pleased that the court agreed these warrants were lawful and justified in this case, and rejected each of the five grounds for which the review was sought. Our investigation into suspected tax fraud continues. We do not comment on individual cases or ongoing investigations.”

Of course just because the owner of Newcastle United was also a director of Rangers who were found guilty of tax fraud. that doesn’t mean he’s engaged in tax fraud here.  In 2014, Mike Ashley owned just under 9% of the company that owned Rangers FC and tried to own more – but the Scottish FA turned him down.

In January 2015, Rangers fans became angered by Mike Ashley’s plans to secure a £10 million loan using Ibrox Stadium as security. The main Rangers supporter groups became heavily critical of Ashley and expressed major concern and distrust about his nature and purpose of his intentions.  Eventually on June 23, 2017, Ashley sold his Rangers shareholding to Club 1872 and Julian Wolhardt.

Of course none of these past dealings means that Mr Ashley is guilty of anything at all.

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3 comments to Newcastle United charged with tax fraud over player transfers

  • sickandtired

    In other words, all of the transfers under investigation took place during Ashley’s ownership.

    No point beating around the bush – and it comes as hardly a surprise to Toon supporters that the guy is crooked and those he surrounds himself with too.

    Probably why he suddenly decided to say he would be open to selling the Club in August, 2 months after the tax raid.

  • Samuel Akinsola Adebosin

    Hmmm, tax fraud never seems to want to stop. Save, it be stopped as it has gradually crept into top professional football management boards unleashing it’s venom there. Thus, not limiting itself to attacking top football players anymore who have been caught to be committing the undesirable acts. In this case involving Newcastle FC who are alleged to have joined the gang of tax fraudsters, if it is proved beyond reasonable doubt they have committed tax fraud, let’s wait to see the punishment that will be dished out to them.

    On Ozil and Sanchez not extending their cintracts at Arsenal so far this season as they are yet to sign a new extension to their expiring deals at the club by say, 2 more seasons to add to this current season they are in which will make it nearly 3 seasons, I want the duo to remain at Arsenal beyond this current season’s campaign which if they don’t extend, they’ll leave the club. My reason for wanting them to extend is because the duo are top quality players with different inherent top quality attributes. One is a top corner kicks and assist specialist, and the other is a proven scorer of many goals in all completions for Arsenal and also a creator of goals scored too. Thus, making these two a kind of footballing germs around.

    At it stands now in the Arsenal senior first team squad that was named by Le Prof in his 25 man Arsenal senior first squad for the first half of this season’s campaign, Ozil Sanchez and the new arrival Lacazette are obviously the eye catching top quality players with exceptional skills in the Arsenal senior first team squad. No disrespect to the rest of the senior Gunners in the first team squad. They too are quality players of their own standing.

    It will be good for Arsenal FC and us the Gooners, if Le Prof will persuade and convince the Arsenal board and of course sanctioned by Stan Kroenke to give Ozil and Sanchez the contract extensions they deserved to get at Arsenal. So that the duo will settled down in their minds to focus totally on footballing for Arsenal at least for the next 2 seasons before another contract extension for they will come up.

    With these 3 too quality players of Sanchez, Ozil and Lacazette in the Arsenal senior team and settled in their minds to be focusing on their games for Arsenal in all competitions this season, and Le Prof if necessary adding one other new top quality player during the coming January window, but certainly not that Thomas Lemar anymore at that crazy £92m. For what proven top class is he in comparison to the proven top quality class which Ozil, Sanchez and Lacazette possessed that should make him to command such a whopping amount of money in transfer fee?. What is he playing now in League 1 this season? Is he now playing there a one season young player football that fades away the next season for Monaco? And also Arsenal should not sign that arrogant Julian Draxler now at PSG who has been turning Arsenal turn at any occasion they attempted ti sign him.

    Surely, if Arsenal will extend the contracts of Ozil and Sanchez for them so as to totally make them to focus on Arsenal, and also do the needfuls as they concern other Gunners who needed the needfuls to be done for them too, I believe Arsenal will not miss out winning any of the 4 titles they are competing in to win this season but will win them all. More so, if in the January window, the squad needs reinforcements to further strengthened and is reinforced for their 2nd half the season’s campaign.

  • It’s all about William C, Sam. Yes things are really moving forward a t a rate aren’t they. Mike as we know is a bit too creative and he should have expected this seeing as he had already let the cat out of the bag regarding employees at Sports Direct and their Warehouses, lets not even get into the suppliers for some of their wares. Then there was Rangers and obviously Newcastle were about to be next.

    I think the Jordies can expect a new owner in the near to mid term, not that he will want to give that little gem up easily, but if he’s smart and gets his timing right, that would be a great sale. Which I think slippery Ol’ Ashley always knew, the Stadium is pretty big, they have a sturdy fanbase and a decent squad. with easy external links to the Port City. I think you call that a relative gold mine.

    NB: to Ashley; don’t sell to Americans, go Emirates or Chinese. Let’as talk Money.

    On that note some good news (in my view):

    USMANOV DENIES KROENKE TALKS

    Alisher Usmanov has denied holding talks about selling his shares in Arsenal to majority stakeholder Stan Kroenke.

    Reports suggested Kroenke Sports Enterprise UK (KSE) was set to offer around £525m to buy the 18,695 shares held by Usmanov’s Red and White Securities Limited.

    He said: “In recent days, there has been speculation relating to a possible offer for my 30 per cent stake in Arsenal. As part of that, I can understand the anxiety that these rumours are causing to the fans as reflected by the Arsenal Supporters Trust.

    “In light of this, I would like to be clear that I am not holding any talks with Mr Kroenke about a sale.

    “My interest in Arsenal from the beginning was long term and my intention has always been to buy additional shares should they become available.”

    Kroenke wants money, Usmanov has time, he can buy another 20% in my view.

    I also liked Friday 6th October edition Metro Final Third: Fighting Spirit, an honest appraisal of Arsenal affairs, regarding the new grit epitomised by Sead Kolasinac, The delay reagarding the signatures of those two key men, incidentally no mention of Jack. And the power struggle in the boardroom, a recipe for success?

    The following quote struck me; “sometimes adversity, brings out unexpected reaction”.

    Indeed, they wrote us off way too early this time I feel, we are best when we are superior and swaggering, but if you watched that season, yes that imperious season, you will know we had to grind some of those results. it was indeed ‘Shere Willpower’!

    So Chelsea and West Ham next, Spurs anyone? I do believe that Spurs may escape the worst of it, but the exposure of .gov assistance for the state aid, that could be problematic.

    Looks as though Blind and Herrera could be the next victims of the Jose axe, as expected, Shaw may follow and Jones could be on the heels of any of them.

    Ronaldo has requested the company of his DM international teammate, not sure how he fits intot he system, but hey.

    Ozil would only consider 5 clubs, according to the Manchester based newsoutlet, who say United are favourites to seal the capture of the wantaway assistant goal provider.

    Meanwhile Alexis has been seen signing PSG shirts, following the collapsed move to City, all because Wenger refuses to spend money £93m and is so miserly and inept, he wants to lose a £35m assert which can hold it’s value at this late state in it’s product lifecycle.

    So it seems there may be a GOD after all, May looks unlikely to make Xmas, Boris is a Patriot, and has a conscience which forces the odd Freudian slip, courtesy of his diminished Eaton boy ego.

    She looks unlikely to be able to deliver Brexit, and is consistently having to curtail social policy reforms which kill. And is now even trying to offer bad policy to Students, which would reduce returns tot he treasury and encourage students to put off making money after completing their studies.

    Corybn looks like he will take it courtesy of being the only other viable option, Vince, you’ll be dead soon, and you have one foot in ancient history and one in the future and seem detached from now, 2nd referendum rallies aside.

    Meanwhile Police continue to probe football and I keep on trying to get my s**t back together in spite of the .gov setbacks.

    Sunny, sunny, October and a cool crisp air in polluted Britain, things may just be turning upwards in this little backwater.

    COYG

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