UK tax body opened probe into Man City in 2018: FT report

LONDON – UK tax authorities launched an investigation into Manchester City in 2018 to determine whether the club – recently found guilty of breaching Premier League financial rules – used complex arrangements to reduce tax, the Financial Times reported on Oct 7.

HM Revenue & Customs (HMRC) opened the probe following the publication of leaked club emails in the German weekly Der Spiegel in late 2018, the FT said, citing “people with knowledge of the situation”.

The investigation – which does not involve allegations of deliberate fraud – was never formally closed, and HMRC has taken no action against the club.

Contacted by AFP, the tax office declined to comment, citing taxpayer confidentiality.

Abu Dhabi-backed Manchester City, which an independent commission found guilty of violating Premier League financial rules between 2009 and 2018, had yet to respond to an AFP request for comment on the FT report.

A takeover of City in 2008 by Sheikh Mansour bin Zayed al-Nahyan, the vice-president and deputy prime minister of the United Arab Emirates, transformed the club and they have since won eight English Premier League titles and one Champions League trophy.

The scandal threatens to tarnish one of Abu Dhabi’s most dazzling showcases of “soft power” and confronts the UK with a delicate balancing act in preserving its long-standing ties with the Emirates.

Last week, British Prime Minister Andy Burnham, the former mayor of Manchester, praised the investments made by the club’s Emirati owners and said he would be “really concerned to lose them”.

Downing Street subsequently qualified his remarks, emphasising that no one is “above the rules”.

The commission found City guilty of more than 100 breaches of Premier League financial rules over nearly a decade.

It said deals agreed by the club artificially inflated revenues and reduced costs by more than £900 million (S$1.5 billion) between 2009 and 2018, a period in which they won three Premier League titles and other silverware.

City have appealed the ruling, while no sanction has yet been decided. But the club risks substantial points deductions, a fine and even expulsion from England’s top division, according to analysts. AFP