Tax probe into £1million loyalty bonus for Payet
Controversial payment to former West Ham star is a part of inquiry 150 players in England are being probed over image rights deals
A CONTROVERSIAL £1million loyalty payment to France midfielder Dimitri Payet by West Ham was one trigger for last week’s raids by the taxman on football clubs, The Mail on Sunday can reveal.
Payet signed for West Ham from Marseille in June 2015 for £10.7m and was a massive hit in his first season. But he left in January after effectively forcing his way out by going on strike.
The manner of his £25m return to Marseille left a bitter taste, given that Payet had been paid the £1m loyalty sum in September last year, in an attempt to persuade him to stay.
Insiders say that specific payment is now one focus of the tax probe by Her Majesty’s Revenue and Customs (HMRC) officials.
This newspaper can reveal that the investigation has expanded in recent months to involve some 150 players in England — most of them foreigners in the Premier League — and they include a number of junior footballers currently claiming tax breaks on image rights when they are largely unknown.
The inquiry is aimed at trying to ascertain which companies or individuals — including clubs, agents and players — were responsible for paying tax on specific transactions, and whether they properly fulfilled their obligations to do so. There is no suggestion West Ham have done anything wrong.
No firm conclusions will be reached for some time. But alleged tax evasion related to image rights and other payments from clubs to players and intermediaries is key.
Circumstances around at least four players involved in moves to Newcastle United are being looked at, including the transfers of Demba Ba from West Ham in 2011, Moussa Sissoko from Toulouse in January 2013, Papiss Cisse from Freiburg in 2012 and Sylvain Marveaux from Rennes in 2011.
Ba’s ‘free’ transfer to Newcastle six years ago illustrates the multifaceted nature of many football deals.
The player triggered a clause in his contract to allow him to move from West Ham for nothing when they were relegated at the end of the 2010-11 season but Newcastle still spent about £2m on fees related to signing him.
Paperwork seen by The Mail on Sunday shows that Ba’s agent Habib Sissoko received £200,000, an agent working for Newcastle received £275,000, a company with a bank account in Panama received £375,000 and a corporation owned by Ba received £913,500, apparently a signing-on fee. Another agent and a law firm also received money.
None of the payments in themselves broke any rules or were illegal. But sources say that HMRC are assessing whether they were appropriately assessed for income purposes and taxed.
HMRC have yet to ascertain the precise circumstances of the Payet loyalty payment and are investigating it for tax reasons.
West Ham insist they have done nothing wrong as a club. Vice-chairman Karren Brady said yesterday that the club were asked to ‘provide documentation to HMRC in relation to player transfers as part of a wider probe in football’.
She added: ‘This was the extent of their request and no approach has been made to any directors, officers or employees of the club. The club are thoroughly satisfied it has conducted itself appropriately in its transfer activity.’
Well-placed sources say the raid on West Ham resulted in the confiscation of an email trail and a substantial amount of paperwork regarding the £1m Payet loyalty payment and investigators will be looking for more detail of what appears to be ‘a complex arrangement’. West Ham may have been relieved to get rid of a player who had become a headache towards the end of his Hammers tenure, especially at a profit, but it seems he will leave a cloud over the club for some time.
A source close to the investigation into West Ham and Newcastle told The Mail on Sunday that HMRC are concentrating on image rights connected with mainly foreign signings, as well as payments to agents.
The source said the number of players being investigated across football for alleged image rightsrelated tax dodges has tripled to 150 since December.
As many as another 10 clubs may be investigated over the next three months. ‘What’s happened so far is the tip of the iceberg,’ our source added.
A number of football-based payments to British Virgin Islands are also being looked at, while tax experts have predicted the whole tax system in football will eventually come under the miscroscope.
One expert said: ‘It cannot be right that a number of Premier League clubs have very young players, not even in the first team, earning 20 per cent of their salaries through image rights before anyone knows whether they will even make it in the game’.