Man City: HMRC urged to scrutinise tax implications of verdict revealed by Premier League

A cross-party group of MPs has urged His Majesty’s Revenue and Customs (HMRC) to thoroughly examine the findings from the Premier League’s investigation into Manchester City. The investigation, conducted by an independent commission, concluded that Manchester City breached Premier League financial regulations during the 2009-10 to 2017-18 seasons. According to the report released earlier this week, the club was found guilty on all charges. Despite these conclusions, Manchester City has denied the allegations and intends to file an appeal by this Friday.

The commission uncovered evidence that Manchester City had inflated their revenue through sham sponsorship deals, orchestrated with assistance from the club’s owners. The report detailed how the club used certain methods to hide the actual scale of their liabilities. In response, the Treasury Committee, which oversees matters related to HMRC, has requested clarification on whether the tax authority has obtained the redacted documents included in the commission’s report. Dame Meg Hillier, chair of the Treasury Committee, emphasized the significance of the case, expressing a desire for reassurances from HMRC that it acknowledges the seriousness and public interest involved.

Additionally, a report from Tax Policy Associates claims that Manchester City may have avoided paying up to £12 million in unpaid taxes linked to a “sham” contract with former manager Roberto Mancini. Beyond the unpaid income tax and National Insurance contributions, the club could face penalty charges potentially raising their total liabilities to £24 million.

Manchester City plans to argue in their appeal that some key sponsorship agreements were funded by the Abu Dhabi government rather than the club’s owners. The club’s owners, Abu Dhabi United Group (ADUG)—a private investment company connected to Sheikh Mansour, the vice-president and deputy prime minister of the United Arab Emirates—reportedly augmented the value of commercial deals by over £830 million through a disguised funding scheme. This practice allegedly allowed the club to appear compliant with Premier League and UEFA financial regulations. However, Manchester City claims to hold evidence suggesting that the sponsorship payments came directly from the Abu Dhabi government. The commission, however, dismissed this explanation as fabricated post hoc to conceal the true nature of the funding scheme.

This defense is anticipated to reignite discussions about the extent of separation between City’s ownership and the Abu Dhabi state, as well as the broader implications of sports ownership linked to a national government. Sheikh Mansour is part of Abu Dhabi’s ruling family and brother to the UAE President Sheikh Mohamed bin Zayed Al Nahyan. Although Manchester City has consistently maintained it is a private business and not state-owned, some critics dispute this, accusing the club’s ownership of engaging in “sportswashing,” a practice aimed at improving the image of the UAE amid human rights concerns.

City chairman Khaldoon Al Mubarak recently referenced “irrefutable evidence” supporting the club’s defense, arguing that the commission’s report contains “clear material errors, of law, principle and fact, and is unsafe.” Notably, Al Mubarak, who has served as chairman since the club’s acquisition in 2008, is listed as an Emirati diplomat in the UK government’s registry of foreign representatives. Diplomatic status grants certain immunities under the Diplomatic Privileges Act (1964), shielding diplomats from prosecution under criminal, civil, and administrative laws.

On the commercial side, Etihad Airways, City’s main sponsor, has expressed its intention to consider legal action against the Premier League. The airline asserts it was not named in the redacted report but claims the publication has caused “damaging implications.” Etihad firmly denies any involvement in improper commercial arrangements. The airline is owned by L’Īmād, a sovereign wealth fund chaired by the Crown Prince of Abu Dhabi, who is the son of the UAE president. When approached, the Premier League declined to comment on the matter

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