Soccer-MP seeks HMRC answers on tax implications of Manchester City ruling

MP Grills HMRC on Tax Implications After Manchester City Premier League Ruling

Parliament Scrutinizes HMRC Response to Manchester City Case

By Lori Ewing

Background: Manchester City Premier League Ruling

MANCHESTER, England, Oct 1 (Reuters) - The fallout from the Manchester City case reached Parliament on Thursday, with the chair of the Treasury Committee asking Britain's tax authority HMRC what action it was taking in response to the Premier League's findings.

Treasury Committee Chair's Actions

Meg Hillier said she had written to HMRC Permanent Secretary JP Marks following the publication on Tuesday of the independent commission ruling that the club had committed "well over 100 individual breaches of the Premier League Rules across the course of many seasons".

Questions Raised to HMRC

In her letter, Hillier sought assurances that HMRC was "seized of the importance" of the findings and questioned the tax authority about its response.

She asked whether HMRC was aware of the commission's findings, whether it had requested or been provided with an unredacted copy of the report and what assessments it had made of any potential tax implications arising from the case.

HMRC Powers and Potential Tax Implications

HMRC can unpick a company's tax returns and reject contrived transactions if these serve to reduce the company's taxable income. HMRC can also apply financial penalties if taxes are underpaid as a result of false statements.

However, the actions City are accused of would serve to artificially inflate a company's profitability, and would be more likely to pay higher taxes.

Premier League Findings and Wider Impact

Allegations Against Manchester City

Earlier this week, the Premier League said Manchester City used "sham" commercial contracts as part of schemes to inflate revenue and understate costs by more than £900 million over nearly a decade.

HMRC's Broader Work on Football Clubs

"I would also welcome an overview of current HMRC work around football clubs," she concluded. "I would be interested in any common issues around taxation (including the taxation of remuneration) that you have found in their practices, and how HMRC is tackling them."

Reactions and Next Steps

Manchester City's Response

Manchester City did not immediately respond to a request for comment.

Broader Implications for Football

Hillier's intervention broadens the fallout from the case, which has already prompted debate over possible sanctions, the appeals process and potential compensation claims by rival clubs and players.

Manchester City have denied wrongdoing and are expected to lodge an appeal against the commission's findings before Friday's deadline.

(Reporting by Lori Ewing in Manchester; additional reporting by Tom Bergin in London;Editing by Christian Radnedge)