The investigation found clubs including Blackburn Rovers, Birmingham City and Portsmouth, are based in offshore tax havens and that even smaller clubs in lower divisions such as Ipswich Town and Hartlepool United, are now domiciled offshore.
According to The Times, the growing number of clubs controlled or owned through offshore companies has attracted the attention of HM Revenue and Customs as part of an investigation into league sides. The paper quotes a senior HMRC source as saying the use of tax havens by UK football clubs “is one of the issues we are looking at”.
The investigation was conducted for the Christian Aid charity by Richard Murphy, an accountant who is recognised internationally as an authority on tax havens and who campaigns against them. Overall Murphy found that 14 Premier League clubs, five Championship clubs, two Scottish sides and Hartlepool, a League One club, are based offshore.
This includes Arsenal, Bolton Wanderers, Liverpool, Newcastle United, Sunderland, Tottenham Hotspur, Manchester United, Manchester City and Birmingham City among others.
One of the biggest advantages of being domiciled offshore is it allows the owner to put money into the club which has not been taxed. It also allows the players to receive large chunks of their earnings as ‘image rights’, which the clubs argue generate income around the globe and therefore should not incur full UK tax.
However, The Times reports HMRC as saying it believes many image rights deals — which relate to a club’s earnings from merchandise and footage associated with players — are artificial and has challenged dozens of teams over such payments.