Harry Redknapp 'avoided tax on bungs'

Tottenham Hotspur manager Harry Redknapp received $295,000 which he had no intention of declaring for tax purposes, a court has heard.

Mr Redknapp was paid the "bungs or offshore bonuses" by former Portsmouth chairman Milan Mandaric while he was manager at the club, it was claimed.

Jurors were told secret payments were made to Mr Redknapp's Monaco bank account in the name of his dog.

Mr Mandaric and Mr Redknapp deny charges of cheating the public revenue.

John Black QC opened the prosecution's case at Southwark Crown Court by telling jurors "both parties must have known" they were avoiding taxes.

"These payments were a bung or offshore bonus that the parties had absolutely no intention of paying taxes for," he said.

Jurors were told when Mr Redknapp was director of football at Portsmouth his contract entitled him to 10% of net profit from transfers.

When he moved to the manager's job in March 2002, his profits from transfers reduced to 5%, the prosecution said.

When striker Peter Crouch, who was bought for £1.25m, was sold for £4.5m, Mr Redknapp's share was £115,473 - but that would have been double had his contract not changed.

The prosecution allege Mr Redknapp instead received a secret payment from Mr Mandaric into an account in Monaco in the name of "Rosie 47" - a combination of his pet dog's name and his year of birth - the prosecution said.

It was heard that in 2002 Mr Mandaric paid $145,000 into this account and on 13 January 2003, following a fax request from Mr Redknapp, $100,000 moved from "Rosie 47" to a company in Miami called First Star International.

This firm was a personal account for Mr Mandaric, jurors heard.

On 21 April 2004 Mr Mandaric made a further payment of $154,000 into Mr Redknapp's account, it is alleged.

Early in 2008 Mr Redknapp wrote to the Monaco bank and requested the remaining $207,000 to be transferred to his London HSBC account, the court heard.

Heart surgery

The jury was told that Mr Redknapp never mentioned the Monaco account as he was investigated by HM Revenue and Customs officials over his transfer dealings at West Ham United.

The probe, between January 2004 and October 2006, "was originally prompted by concerns over a £300,000 payment... regarding profit made in a player transfer, namely Rio Ferdinand," Mr Black said.

The Monaco bank account eventually came to light during an inquiry into illicit payments in football, led by Lord Stevens, the former Metropolitan Police Commissioner, jurors heard.

Serbian-born Milan Mandaric is now chairman of Sheffield Wednesday

Both men deny two counts of cheating the public revenue.

The first of the two charges alleges that, between 1 April 2002 and 28 November 2007, Mr Mandaric paid $145,000 (£93,100) into a bank account held by Mr Redknapp in Monaco, to avoid paying income tax and National Insurance.

The second charge for the same offence relates to a sum of $150,000 (£96,300) allegedly paid by Mr Mandaric to the same account between 1 May 2004 and 28 November 2007.

Mr Redknapp, 64, of Poole, Dorset, who underwent minor heart surgery last year to unblock his arteries, is the most successful English manager in the modern game, having led Portsmouth to FA Cup success and Spurs to last season's Uefa Champions League quarter-finals.

Serbian-born Mr Mandaric, 73, of Oadby, Leicestershire, is now chairman of Sheffield Wednesday, having previously worked at Leicester City.

The trial continues.