As the Sunday Times reports this morning:
An examination of filings at Companies House by a chartered accountant found that 14 Premier League clubs, five Championship clubs, two Scottish sides and Hartlepool, a League One club, are based offshore. While this partly reflects the increasing foreign ownership of the Premier League, many clubs based in tax havens remain in British hands.
As it notes:
Blackburn Rovers is controlled by the family of Jack Walker, the late steel baron, through a trust in Jersey.
Championship side Ipswich Town is owned by Marcus Evans, the Liberal Democrat donor who is domiciled in the UK for tax purposes but owns his controlling stake in the club via an operation in Bermuda.
Wolverhampton Wanderers, which finished towards the bottom end of the Premier League this season, is owned by Steve Morgan, a construction magnate, through Bridgemere Investments in Guernsey.
Mohamed al-Fayed, the Egyptian millionaire who sold the Harrods department store this month, owns Fulham through Mafco Holdings in Bermuda.
Portsmouth, which was forced into administration in February over £11.6m owed to HMRC, is controlled by a company based in the British Virgin Islands. The team has been relegated from the Premier League, as has offshore-owned Hull City.
They add:
The examination of the clubs’ filings was carried out for Christian Aid, the charity, by Richard Murphy, an accountant who is recognised internationally as an authority on tax havens and campaigns against them. Christian Aid is campaigning for greater corporate financial transparency.
Why do we argue that this? As Christian Aid says:
Blowing the Whistle: Time’s Up for Financial Secrecy, reveals how the same tax-haven secrecy that allows football club owners to hide their business practices — and even their identities — is also facilitating massive tax dodging in developing countries.
And while such practices are threatening to ruin the beautiful game, for people in the world’s poorest countries they are a matter of life and death.
But of course not all agree, inevitably. As the Sunday Times notes:
Mike Warburton, a senior tax partner at accountants Grant Thornton, said: “The growing number of clubs owned through tax havens partially reflects just how attractive British football clubs have become to the world’s wealthy as an investment opportunity.
“British football clubs are important for our economy and it would be unwise for the government to do anything to jeopardise that.”
With the greatest of respect to Mike Warburton, this is, even by his own standards a ridiculous comment.
First of all, if UK football clubs are so important to the UK economy why let a farce like Portsmouth happen? Or Leeds? Or Notts County?
As is obvious the opacity of offshore is undermining football to the extent that the validity of the football league is being threatened and a UK club that has qualified for Europe will not be allowed to play. In the face of this obvious fact Warburton’s defence of the status quo is a defence of chaos.
Accountants like Warburton defend the same opacity when used to undermine the economies of developing countries. Defending chaos in the UK football league is one thing: defending the abuse of whole populations quite another. But this is exactly what the higher echelons of the accounting profession is doing — deliberately, knowingly and openly condemning people to poverty when it is within the gift of the accounting profession to change this for good.
As Christian Aid says, its demands are threefold: country-by-country reporting, full transparency for all limited liability entities throughout the world and automatic information exchange. These are all possible now.
But accountants object to them.
May the poor of the world be on your conscience Mike Warburton. You and your likes are making sure they stay in poverty. This is not an accident: you are deliberately making sure they stay that way.
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A few points:
1, Why attack the accountants for this? Bankers, trust companies and lawyers are also involved in these arrangements.
2. It is all very well to blame accountants when, to be frank, your ire should really be turned on either the government (who make the laws) or HMRC (who administer the tax laws, depending on where you believe the fault to lie. I cannot comprehend your ongoing whine at accountants who only operate within the parameters set by the state and revenue. If the act outside the law, there are sanctions available, if they plunge into the murky grey world between legal and illegal, there are again sanction available to the revenue. When there is a dispute we have the courts to ajudicate.
3.I don’t believe that government or it HMRC has the stomach to take on football clubs as it contributes to the feel-good factor while the politicians muck up the country.
“Blackburn Rovers is controlled by the family of Jack Walker, the late steel baron, through a trust in Jersey.”
Well, they do live in Jersey and have done since 1974. They also own 69% of Jersey European Airways, so I think they have probably established their offshore bona fides.
I am surprised that anyone sees owning a football club as a good investment. It’s more like a hobby for rich people to indulge in. But as it can be tightly regulated by the FA/Premiershiup/Football League, why do the authorities not insist on transparency on ownership?
Secondly, unless I am missing something, I cannot see how the residence of the holding company can make any difference to the dubious practice of paying non domiciled players for image rights as suggested in the article.
@Alex
But that does not for one second change the opacity of the arrangement
And that is the point being made
@Justin
1. I have mentioned bankers and lawyers too, and do so, repeatedly
2. The reform required is outside the UK. How are HMRC responsible?
3. Ditto.
@Iain
The location of the aprent company does not change this EXCEPT the FATF have suggested it easier to make offshore payments in that case
I have not made that suggestion
Christian Aid have not made that suggestion
The FATF have
They are deeply troubled by money laundering in football
I don’t think anybody in the Walker family is trying to hide their ownership of Blackburn Rovers or any other business interests, and presumably any family trusts were established on or before Jack Walker’s death as provided in his will for the equitable distribution of his estate between his descendants. Walker moved to Jersey and presumably paid all the requisite exit charges in 1974, so I really don’t see your point apart from sniping at people who are no longer subject to UK taxation.
Alex
No one suggested a personal criticism of jack Walker
The entirely appropriate criticism is of the deliberate opacity Jersey permits
After all Jersey is a secrecy jurisdiction and secrecy jurisdictions are places that intentionally create regulation for the primary benefit and use of those not resident in their geographical domain. That regulation is designed to undermine the legislation or regulation of another jurisdiction. To facilitate its use secrecy jurisdictions also create a deliberate, legally backed veil of secrecy that ensures that those from outside the jurisdiction making use of its regulation cannot be identified to be doing so.
Richard
Time for the Big Ref to blow the whistle
Seeing as most football clubs run at a loss, i’m not sure why Christian Aid should really be that bothered! If they are trying to get football fans to support their campaign I would suggest they exert their energies elsewhere!
The image rights issue is far more interesting.
@Greg
You seem, as ever to entirely miss the point, which is opacity and not, necessarily tax.
After all who knows whether they really run at a loss when we cannot see the parent company accounts?
@Richard Murphy
I don’t know, but I suspect that the Walkers do not live in Jersey for “opacity”, but simply because they pay less tax.
@Alex
Who knows?
That’s the problem of opacity
I don’t get the criticism of Jack Walker. Richard, you question why individuals use companies in jurisdictions other than where they live, so surely if the Walker lived in Jersey for several decades they ought to be able to use Jersey companies. Why shouldn”t they?
@Rupert
But Jersey should not offer secrecy
That’s the point
Why is it so hard for you understand that?