Warrants were issued to HMRC in April allowing investigators to search properties and seize documents as part of a probe into suspected evasion of VAT, income tax and national insurance contributions by Newcastle FC linked to payments involving football agents.
In the wake of the raids, Newcastle made a legal challenge against the warrants. The club argued there were insufficient grounds to suspect it was involved in tax fraud and highlighted what it said were procedural errors in the issuing of the warrants. It also obtained an interim order that stopped HMRC from scrutinising the documents until the courts could determine the legality of the raids.
Raids ruled legitimate
High Court judges Lord Justice Beatson and Mrs Justice Whipple yesterday ruled that the raids were legitimate.
They said in their judgement: “We are satisfied that the evidence and the facts disclosed by that evidence provided reasonable grounds for the belief that [the football club] was engaged in criminality. …. It is self-evident that ‘reasonable grounds’ for belief are just that. They do not mean that any criminal offence has in fact been committed. There may, at the end of the investigation, turn out to be innocent explanations for what happened.”
Jason Collins, a tax crime expert at Pinsent Masons, said the case showed “those under criminal investigation need to pick their battles wisely. Having failed to overturn the warrant, the club has been left with the High Court publicly affirming that HMRC has reasonable grounds for believing the club has been engaging in criminality – which can conjure up negative newspaper headlines, even if the Court has said that this is not a statement of guilt,” he said.
