£250MILLION TAX BILL FOR 129 PREM STARS
Top names face financial ruin as Inland Revenue goes after avoidance scheme
TOP footballers face a bill of £250million after investing in a tax avoidance scheme.
HMRC is chasing 129 players who paid into a film project. One ex-Man Utd star put in £33.5m.
It is claimed they were badly advised. But one adviser insisted “without exception” they were made aware where the cash went.
FOOTBALLERS who ploughed their cash into a tax avoidance scheme could face financial ruin if hit with massive bills to repay the money and fines.
One former Manchester United star invested £33.5million, a mix of his own cash and a bank loan, in a movie-based project that allowed him to significantly reduce the duty he paid on his Premier League salary.
The household name is one of 129 top players who put a total of £250million into the scheme through financial advisers Kingsbridge.
Other clubs with high-profile investors included Liverpool – where one paid £10.4million in cash and loans – Aston Villa and Blackburn.
Kingsbridge staff earned huge bonuses on the back of the payments.
HMRC is now trying to claw back at least 70% of the amounts put in, plus interest and penalties.
It means players face bills similar to their original investments as income paid back to the scheme from the films was taxable.
Critics claim the players knew they were avoiding tax. But experts claim the stars had little or no idea how their money was being used. Investor Rescue Organisation founder Stuart Cotton said: “Footballers have been demonised over years for investments into tax avoidance schemes.
“The truth is most were not privy to how the arrangements work. The result of investing in such schemes is beyond comprehension at times.”
XPro, which supports former footballers in debt matters, insisted the responsibility lies with scheme promoters and banks, who provided the loans. A source said: “There is a deep sense of shame attached to this group. “They are high-profile figures, international footballers. None of them knowingly embarked on a plan to pay less tax.” Julia Norris, of Manchester-based FS Legal, said the players should have been told schemes were “very high risk” and warned some now face “financial extinction”. She added: “Where investors try to reduce their tax bill, some might say they got what was coming. “But many were going to pay any money owed down the line, plus interest. They are not tax dodgers. They are tax delayers.
“One man placed £300,000 of his own money, plus a £7million loan. He now has a £7million tax bill.
“It was sold to him as a cash flow advantage, it is not the evil tax dodge as so often portrayed. Advisers were usually on commission on any loans, plus fees, so did very well indeed.”
But a spokesman for former Kingsbridge advisers David McKee and Kevin McMenamin insisted clients “without exception” were made aware of the products in which they were investing. He added: “They were clearly advised in relation to commission arrangements.”
HMRC removed the tax break in the late-2000s. Some investors formed a group to take action against Kingsbridge – which went into liquidation in 2015 – and the banks involved in the schemes. HMRC said: “Most tax avoidance schemes don’t work. People can end up paying more than they were trying to avoid.”
Many were going to pay money owed down the line. They are not tax dodgers JULIA NORRIS (RIGHT) ON PLAYERS INVOLVED IN SCHEME