Newcastle United are under investigation over an alleged tax evasion scandal in which the club used ‘sham’ contracts to hide ‘extensive’ amounts of money, reports The Guardian.
Such allegations relate to the transfers of a number of players including Demba Ba, David Santon, Papiss Cisse and more, where Newcastle are accused to creating false contracts that disguised the true recipients of supposed agents’ fees.
Funds were reportedly secretly transferred by a law firm to a number of agencies related to the aforementioned players and unlicensed agents, resulting in both player and club evaded income tax and national insurance because the fees were not treated as “taxable benefits enjoyed by the player”.
Newcastle further benefitted by reclaiming VAT on false agents’ fees, which were instead funnelled to third party companies.
All of this is said to have gone on under the full knowledge of Newcastle United and owner Mike Ashley.
“I believe that the contractual arrangements are a sham and do not reflect what actually happened,” said Lee Griffiths, an HMRC officer. “The club’s agents passed on the vast majority of their fees to other agents acting for the players or to associates of the players.”
A previous statement, issued at the time of the raids, which involved 180 officers in the UK and France, said: “This criminal investigation sends a clear message that, whoever you are, if you commit tax fraud you can expect to face the consequences.”
