Premier League clubs could be demoted or prosecuted under the new Criminal Finance Act, if their players are found guilty of tax evasion.
That’s according to Tom Shave, a partner in business tax at Smith & Williamson, who says new legislation means that it’s the responsibility of clubs to evaluate their players’ tax situation. The new law says that any company “can be held responsible for their employees or agents with whom they do business if tax evasion becomes an issue.”
Peter Fairchild, another partner at the tax firm, says it could have an impact on the transfer market as well. He told WorldSoccerTalk.com: “I am a bit surprised we haven’t had more enquiries. Many clubs are only just getting to grips with the problem, perhaps thinking that it doesn’t apply to them or that there is a short cut.
“But there is no short cut. (The tax authorities) will come and ask their questions and if you don’t have a robust defence the weight of legislation will be used against you.
“When it comes to January 31st those clubs that are struggling, or trying to get deals done, won’t want to be told have you taken the time to go through the proper process and complied with the check list regarding the player they are targeting.
“Those clubs who don’t take it seriously could find themselves facing an HMRC (Her Majesty’s Revenue and Customs) investigation in a year or two.”
To be honest, it’s probably not a bad thing to see clubs facing more responsibility in this regard. We’re seeing more and more high-profile players having their taxes called into question, with Ronaldo, Messi and Neymar among those subject to investigations recently.
However, with no punishments for the clubs at this point, it’s hard to see any incentive for those clubs to do much to stamp out the issue. As long as the players aren’t jailed, and perform for the team on the pitch, you can understand why they thought the rest wasn’t really their problem.
Now that’s changed. I’d like to think that Arsenal do things by-the-book in this regard, as a decade of complying with Financial Fair Play whilst most other clubs ignore it would be a bit pointless if the Gunners got punished for watching on as players avoided paying tax.
Unfortunately, without any inside knowledge of players’ tax affairs, I can’t say that with any sort of certainty. In fact, given earlier this year Alexis pleaded guilty to tax fraud during his time in Spain, perhaps we should be more worried.