Football tax review called for by HMRC chief

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Jose Mourinho and Cristiano RonaldoImage source, Getty Images
Image caption,

Jose Mourinho and Real Madrid's Cristiano Ronaldo were the focus of a tax story in Sunday Times.

The chief executive of HM Revenue and Customs, Jon Thompson, has told MPs he would like to see a review of the way footballers can reduce their tax bills.

He said payments to them for their image rights were "the most significant risk in football" faced by HMRC.

Some footballers and entertainers have income from image rights paid into offshore accounts without tax deducted.

HMRC said dozens of footballers are under investigation for potential irregularities in their tax affairs.

Mr Thompson told MPs that on the issue of image rights: "I think if it was me, I would want to review this... It is quite difficult to explain to a football fan that that is the law."

The HMRC's head of enforcement, Jennie Grainger, said that 43 players, eight agents and 12 football clubs were under investigation.

Ms Granger said HMRC has a dedicated team looking at image rights, football, other sports, and the entertainment industry.

She told the Commons Public Accounts Committee (PAC): "Just on football itself, in the last two years, that team, and wider across HMRC, has brought in £158m in yield."

Ms Granger said HMRC is investigating whether some claims to separate image rights earnings from earnings as players are genuine.

"Has it been properly transferred? Has it been transferred for a fair value? Should there be income coming back to the UK depending on their residency status? All of those issues can be part of this," she said.

The officials also told the PAC that HMRC had seven criminal investigations under way and had made arrests following publication of the Panama Papers, which provided a huge amount of information about the tax affairs of wealthy individuals.

The action follows the formation of an inter-agency task force six months ago, including HMRC, the FCA, the Serious Fraud Office and National Crime Agency.

Probe urged

At the weekend, the PAC's chairwoman, Meg Hillier, said the tax affairs of football manager Jose Mourinho should be investigated by British officials, following allegations that he used offshore companies to reduce his tax bill.

Mourinho is accused of moving millions of pounds of earnings to the British Virgin Islands to avoid paying tax.

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The HMRC's Jennie Granger told MPs that its probes into football had brought in an extra £150m in tax in two years

According to reports in the Sunday Times, Portuguese-born Mourinho, 53, placed £10m (€12m) into a Swiss account owned by a British Virgin Islands (BVI) firm, which it suggests has no employees.

The newspaper also claims that Real Madrid star Cristiano Ronaldo used bank accounts and companies in Ireland, Switzerland and New Zealand to process substantial earnings for their image rights.

However, Mr Jorge Mendes - the agent for both Mourinho and ex-Manchester United player Ronaldo - denies both claims.

He says both men were fully compliant with UK and Spanish tax rules.

The statement added that the allegations stemmed from a cyber-attack earlier this year on some sports agents, details of which were prohibited by a Spanish court from being published.

HMRC said it would not comment on named individuals, but took "all allegations of tax evasion extremely seriously" and "always investigates allegations of fraud together with any intelligence provided".

The head of HMRC will appear before Ms Hillier's committee - which is responsible for overseeing government expenditure - on Friday.

Manchester United said the allegations related to events before Mourinho's arrival at the club and so it would not comment.