Daily Mirror (Northern Ireland)
CHAMP ‘NEVER GOT A CENT OFF U.S. TAX’
Accountant’s claim as payments after Santa Cruz bouts disputed
BOXER Carl Frampton did not gain “a single cent” in tax savings from title bouts in America, the High Court heard yesterday.
Th e former w orl d champion’s accountant also told of his shock at discovering a company in which the fighter was a director had allegedly racked up losses of £500,000.
Tax arrangements for shows staged in the US came under scrutiny on day seven of Mr Frampton’s legal battle with ex-manager Barry Mcguigan.
The 33-year-old Belfast boxer is seeking £6mi l lion i n al l eged withheld earnings during their eight-year partnership.
His action involves claims against Cyclone Promotions UK Ltd – of which Mr Mcguigan was a director – over purse fees, broadcasting rights, ticket sales and merchandising.
A counter-lawsuit has been filed against Mr Frampton, accusing him of breach of contact when he split from the company in 2017. The two sports stars deny the allegations against them.
Earlier in the hearing it was claimed Mr Frampton saved hundreds of thousands of dollars by under-declaring purses from contests in America.
They included two fights against the Mexican Leo Santa Cruz – in New York in July 2016 and the rematch in Las Vegas the following February. In court yesterday accountant Sean Mccrory, w h o Mr Fra m p t o n enlisted in 2016, was questioned about arrangements on withholding tax – a charge on income received by non-residents.
He told counsel for Mr Mcguigan, Liam Mccol lum Q C, the boxer still had to pay higher rate income tax in the UK. He said: “He hasn’t gained a single cent in tax savings in the USA.
“He’s taxed at source in the USA but in the UK he’s liable to tax on his worldwide income.” During exchanges, Mr
Mccollum and the accountant disputed whether the withholding tax had been added on to a figure of j ust over $1.1million . It was claimed up to $336,000 more should have been declared as income.
But Mr Mccrory repeated firmly : “That is nonsense.”
Mr Frampton’s action centres on an alleged conflict of interest between Mr Mcguigan’s twin role as manager and promoter.
He further claims he was persuaded to sign as a director of another Northern Ireland-based Cyclone company on the promise of a 30% profit share which was never received.
According to Mr Frampton’s case, the final straw in his deteriorating relationship with Mr Mcguigan came when the taxman called at his home in 2017 with a bill for nearly £400,000.
Mr Mccrory told the court he studied the Northern Ireland Cyclone company’s previous accounts. He said: “The accu
mulative losses as of June 2015 were £300,000.” He was asked if he had brought the issue to the attention of anyone at Cyclone during correspondence.
Mr Mccrory replied: “I deliberately didn’t raise that, I wanted to attend a meeting. I kept it up my sleeve.”
Mr Mccollum put it to him the alleged losses were not f lagged up by Mr Frampton until May 2017.
The accountant responded there were two world title fights against Scott Quigg and Santa Cruz in the intervening period. He added: “I would have expected the financial situation to have improved. They were two massive fights... those are the fights you make your money out of.”
Mr Mccrory explained by the time accounts were filed in June 2016 the Quigg contest had been staged. He said: “I was shocked that a £300,000 loss was now sitting at a £500,000 loss.”
The hearing continues.
Quigg and Santa Cruz are fights you make your money out of SEAN MCCRORY YESTERDAY