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West Ham United stadium
istock_JohnnyWalker61

West Ham and Newcastle United

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3rd May 2017
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Tax stories quite often hit the headlines but when they are combined with Briton’s favourite sporting passion, the public gets really excited.

As with so many aspects of tax avoidance, there could be two polar reactions to the news that a total of 180 HMRC officers raided the offices of West Ham United and Newcastle United last week.

On one side, as with the sleazy newspaper stories about Cliff Richard, there is a severe risk that the innocent are wrongly accused with no way of getting records, while no court case can be completely impartial, once the names of those accused have been mysteriously leaked to the media.

On the face of it, the principle that the accused are innocent until proven guilty seems to have been forgotten in HMRC’s efforts to gain some positive publicity on this occasion.

Indeed, as a really excellent article published in the Guardian a week ago points out, HMRC’s track record in prosecuting supposedly evasive players, managers and owners is hardly unblemished.

For everyone’s sake, one hopes that this time it has cast-iron cases to justify the massive use of public resources to hound a relatively small number of people for a tax take that does not sound all that large, in terms of the overall public purse.

Had these 180 officers been set to recover taxes from 180 separate suspected high net worth tax evaders, one suspects that the overall outcome might have been significantly more lucrative, ignoring the likely legal battles to come against taxpayers who one would expect to have almost bottomless purses from which to pay high-powered legal representatives.

The opposite side of the story is perhaps best demonstrated by the problems that Rangers have faced, literally being forced into bankruptcy as a result of entering into tax avoidance schemes that were just the wrong side of the line but may not have seemed like it when they were implemented.

Most members of the public would expect that all payments to top footballers would be subjected to PAYE, almost all of which would be levied at 45%. Ii is worth pointing out that, as an accountant, this taxpayer does not have an image, let alone the opportunity to receive ludicrously large payments for selling rights over it.

Neither does he feel comfortable with the prospect of testing out shady tax avoidance schemes involving offshore trusts, suspicious loans and commercial transactions that nobody in commerce would recognise as such.

The sad thing about this latest revelation is that there are unlikely to be any winners at the end of the day, though many of those involved may be sick as parrots at the end of the (much longer than) 90 minutes of a far from beautiful game.

Over the years, HMRC has had a knack of getting these investigations just a little bit wrong and needs take care not to do so on this occasion. Football will once again be put under the spotlight, with the prospect that the man in the street will conclude that footballers and everybody else involved in this multi-billion pound industry are more interested in making a quick buck than winning a game.

On the plus side, the professions – accountancy and law – are likely to benefit very greatly from the years of wrangling ahead.

 

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