Revealed: Significant update on HMRC investigation into Newcastle United
Newcastle United are yet to reach a resolution in their long-running dispute with HMRC, Football Insider can reveal.
The Magpies’ accounts for 2021-22 show that an appeal has been lodged after the authorities made a claim – believed to be in the region of £5million – relating to the club’s tax affairs in the Mike Ashley era.
The claim centred on alleged underpayment of tax and national insurance, with interest attached.
Newcastle’s directors have assessed the claim and made an adjustment in the form of an accrual – a best estimate of the amount that might become payable – in the liabilities section of their accounts accordingly.
However, their notes emphasise that there is not enough information to deliver a reliable forecast about when such a sum might be due, and indeed if any other unaccrued costs could arise.
A criminal investigation dubbed ‘Operation Loom’ led to a raid on Newcastle and West Ham premises in 2017.
But the criminal probe into both clubs was discontinued in May 2021, six months before Newcastle were taken over by the Saudi Public Investment Fund.
HMRC, however, stressed that they still have a raft of civil powers at their disposal, which could theoretically lead to a 200 per cent penalty on the tax due alongside the interest and the disputed tax in full.
The issue is currently in the hands of Newcastle’s legal advisors, the club reveals in its accounts.
A recent analysis by Tax Policy Associates found that Premier League clubs may have avoided paying £250m in tax between 2019 and 2021.
That research focused on the issue of dual representation, whereby an agent working on a deal acts on behalf of both the player and the club, meaning half of the payment is not taxed.
HMRC has said it is investigating “a number of clubs.”
In other news, Newcastle United now in pole position to sign James Maddison.