Newcastle lose High Court battle with HMRC in £5million tax probe into “secret payments” to players and agents
The club were raided in April and had documents seized but have lost their challenge as the judge says "the warrants were lawfully issued"
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NEWCASTLE stand accused of making “secret” payments to players and agents in a £5million tax-fraud probe.
The club allegedly concocted “sham” contracts to hide where cash was going as part of a “systematic abuse” of the process, a court heard.
According to court papers, tax chiefs believe the transfers of Demba Ba, Moussa Sissoko, Sylvain Marveaux, Davide Santon and Papiss Cisse were all deals in which Newcastle used “purported agents as intermediaries to conceal payments to players and their agents”.
HMRC officials carried out raids at St James’ Park, their training ground and at MD Lee Charnley’s home on April 26.
They suspected evasion of VAT, tax and National Insurance payments.
West Ham’s London Stadium was also raided, while further warrants were executed in France.
Officers took 275 files and 19 digital items from the Newcastle raids.
But a court order obtained by the club prevented HMRC chiefs from examining any of the seized materials.
Newcastle had claimed the raids were illegal.
But yesterday two judges at the High Court in Leeds ruled the warrants had been lawfully issued.
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And the legal ruling outlined the details of the allegations against Newcastle for the first time, with HMRC investigating “a number” of alleged offences “between 2010 and 2013”.
According to the court papers, agent Simon Stainrod claimed a £1.9m payment was declared to have been made to him by Newcastle when Ba joined from Hoffenheim in 2011 — but only £136,500 ended up in his hands.
The rest, he alleged, went to other parties.
Applying for the original raid warrant, HMRC’s Lee Griffiths told a High Court judge: “I believe NUFC must have known they were using Stainrod to pass money to third parties.”
HMRC claimed: “The contractual arrangements are a sham and don’t reflect what happened.
“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, or possibly to the players themselves.
“Therein lies the tax loss. By using purported clubs’ agents as intermediaries to conceal payments, the players and club were able to evade Income Tax and National Insurance.”
After the judgment was released, a Newcastle spokesman said: “We are disappointed with this decision given the court’s findings.
“We are considering all options, including whether to pursue an appeal.”
