Manchester City Faces Criminal Tax Probe Over £12 Million Unpaid

Manchester City should be subject to a criminal investigation for an estimated £12 million in unpaid taxes, according to a report by Tax Policy Associates (TPA).

The report suggests that once interest and penalties are factored in, the Abu Dhabi-owned club could face a total bill of up to £24 million.

These findings, which focus on payments made to former manager Roberto Mancini, add to existing concerns following the club's recent finding of guilt by an independent commission for financial cheating, a scandal that has significantly impacted the Premier League.

Dan Neidle, founder of TPA, stated, "We've examined the decision and leaked Mancini documents. We think City likely failed to pay £12 million in tax. There should be a criminal investigation."

The TPA report scrutinizes findings from the commission that a key individual, identified in separate leaked documents as Roberto Mancini, allegedly received payments through a "sham" consultancy. The commission concluded that this arrangement, in reality, represented Mancini's employment by City.

According to the report, the club "should therefore have applied UK PAYE income tax in the usual way." However, the evidence suggests that the club "unlawfully failed to do so."

It remains unknown whether HM Revenue and Customs (HMRC) has initiated an investigation or if any such investigation has been resolved. The report notes the absence of any settlement payments in Manchester City's accounts.

TPA commented, "The highly irregular nature of the arrangement, and the commission’s findings of sham and intentional concealment, suggest to us that there should be a criminal investigation into whether tax evasion offences were committed."

The report further indicates that the commission's findings regarding City's filing of false accounts also point to the possibility that "criminal offences may have been committed."

Central to the report's allegations are payments of £1.75 million per year to Mr. Mancini, purportedly for coaching services in Abu Dhabi, in addition to his £1.45 million annual salary as manager of Manchester City.

The report detailed, "Mr Mancini was, we assume, fully taxed on his income under his main contract with Manchester City. The club will have applied PAYE to deduct income tax and employee National Insurance from his wages, and paid employer National Insurance on his gross wages."

It continued, "The position for Mr Mancini’s consultancy agreement should have been the same. You can’t magically make a salary untaxed by calling it a consultancy fee. If the payments were really for Mr Mancini’s work at Manchester City, they were employment earnings and should have been taxed accordingly."

The report clarifies, "We are not suggesting that any specific individuals at Manchester City, or indeed Mr Mancini, committed an offence. We do not know."

HMRC has declined to comment on the matter. Manchester City had not responded to a request for comment at the time of publication.