FTSE 100: 7364.56 ▼ -60.84 (-0.82%)
A total of 129 top footballers are being investigated by HM Revenue & Customs (HMRC) over £250 million worth of investments in a tax avoidance scheme, according to the Mirror.
The footballers include a former Manchester United star who invested £33.5 million, a mix of his own money and a bank loan, in a film-based project that allowed him to significantly reduce the taxes he paid on his Premier League salary.
A Liverpool player is also believed to have put forward £10.4 million to avoid taxes on his salary.
The United and Liverpool stars are among 129 players who funnelled money into the scheme through Kingsbridge Asset Management.
The Mirror report said Kingsbridge staff earned huge bonuses on the back of the payments.
HMRC is now trying to claw back at least 70% of the amounts put in, plus interest and fines, meaning they are likely to repay close to what they put into the scheme.
A source told the Mirror: ‘There is a deep sense of shame attached to this group. They are high-profile figures, international footballers. None of them knowingly embarked on a plan to pay less tax.’
The scheme worked by offering tax relief on money invested in films such as the Disney hit Enchanted, and were popular from 2000 to 2004 when the Labour government supported British film makers with tax breaks.
An investor could be asked to pay £100,000 into the scheme, which would then be boosted by a bank loan of £900,000, taking their total investment to £1 million.
They could delay paying tax on all of this money for the duration of the scheme, often 15 years.
The Mirror reported that Kingsbridge advisers David McKee and Kevin McMenamin offered financial management to footballers and agents, with the film schemes also attracting other celebrities and business tycoons.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, said in this instance HMRC removed the tax advantages, and challenged film schemes it deemed were set up specifically to avoid tax.
She added: ‘It’s part of enhanced anti-avoidance activities in recent years, which between 2010 and autumn 2017 have brought in an estimated £160 billion in tax. Those who tried to take advantage now face paying the tax, interest and fines.’
It comes after Citywire revealed a number of former Premier League footballers were suing Coutts and connected financial advice firms for being in ‘joint enterprise’ with their advisers over a controversial property scheme that left a raft of stars with substantial losses.
McKee and McMenamin were again involved. Last year Citywire revealed the adviser duo's old company Formation Asset Management was the subject of a legal complaint from a group of former clients.