British and French authorities launched a major investigation on Wednesday into a suspected £5 million tax fraud in the football industry, with West Ham United confirmed to have been targeted.
Close to 200 tax officials from the two countries swooped on premises on both sides of the Channel in morning raids, arresting several men and seizing financial records.
Newcastle United, who this week won promotion to the Premier League, are also thought to have been targeted, but have yet to comment.
“HMRC has arrested several men working within the professional football industry for a suspected £5 million ($6.4 million, 5.9 million euros) income tax and National Insurance fraud,” British tax authority HMRC (Her Majesty’s Revenue and Customs) said in a statement.
“180 HMRC officers have been deployed across the UK and France today.
“Investigators have searched a number of premises in the northeast and southeast of England and arrested the men and also seized business records, financial records, computers and mobile phones.
“The French authorities are assisting the UK investigation, have made arrests and several locations have been searched in France.”
English Premier League club West Ham confirmed they were under investigation. British reports said tax officials had searched West Ham’s London Stadium in east London.
The Press Association news agency reported that one of the raids was on Newcastle’s St James’ Park ground in northeast England, with managing director Lee Charnley among those arrested.
West Ham, currently 14th in the Premier League table, told AFP they were “cooperating fully with HMRC to assist their enquiries”.
Newcastle are yet to comment, but were thought to be preparing a statement.
Both the Premier League and France’s Professional Football League declined to comment on the matter when contacted by AFP.
– Image rights –
Premier League leaders Chelsea revealed they, too, had been visited by tax officials, but there is not thought to be any allegation of wrongdoing against the club.
“In connection with its wider investigation, HMRC has requested certain information which the club will provide,” a Chelsea spokesman said.
HMRC added: “This criminal investigation sends a clear message that, whoever you are, if you commit tax fraud you can expect to face the consequences.
“As this is an ongoing investigation, HMRC is unable to provide any further detail at this time.”
British reports said the investigations were linked to the transfer market and several experts suggested the probes particularly concerned the issue of image rights.
In January, the British parliament’s Committee of Public Accounts published a report in which it said rules on image rights were being “exploited” in order to avoid taxes.
The rule allows footballers to declare income from image rights separately to their main salary.
It incentivises players to maximise the proportion of income that is deemed to be for image rights in order to reduce their tax liability.
In the report, the committee said HMRC had opened enquiries about the image rights of 43 football players, eight agents and 12 clubs.
The Premier League transfer market is by some distance the largest in Europe.
Around £1.4 billion has been spent on transfers this season, according to financial analysts Deloitte, an increase of 32 percent on 2015-16.
West Ham and Newcastle have signed several players from French clubs in recent seasons, with Newcastle at one point dubbed the “French legion” due to the number of French players in their ranks.