Manchester City cheated Premier League rules, the Commission found. Did it also cheat HMRC? We've examined the…

Manchester City cheated Premier League rules, the Commission found. Did it also cheat HMRC? We've examined the decision and leaked Mancini documents. We think City likely failed to pay £12m in tax. There should be a criminal investigation. Thread:

Our full report is here taxpolicy.org.uk/manchester-cit… Summary follows below. But it's a very shortened summary, do please be careful jumping to conclusions without reading our full report.

There's a lot in the Commission's decision. I'm focussing on one element: a contract under which Roberto Mancini agreed to provide consultancy services to Al Jazira Sports and Cultural Club (owned by Sheikh Mansoor)

The idea - spoilers! - to try to minimise Man City's expenses by moving big costs (like Mr Mancini's salary) "off the books"

The Commission's decision is heavily redacted. We can however be confident the individual referred to is Mr Mancini (we go into this in our report). The Commission also don't include the underlying evidence. But we have this thanks to some brilliant Der Spiegel reporting in 2018.

The Al Jazira contract was agreed in principle on 19 December 2009. Al Jazira would pay Mr Mancini's company (unspecified) a fee of £1,750,000 per year for four days of coaching in Abu Dhabi. "without deduction of any taxation"

By an amazing coincidence, on the same day, Mr Mancini signed an agreement in principle with Manchester City for a basic salary of £1,450,000 per season (net of tax)

Mr Mancini established a Mauritian company - Sparkleglow Holdings Ltd - to receive his consultancy income. Why would he receive more for four day's consultancy work than his season with City? It's a mystery.

Things became clearer when, on 25 March 2011, Sparkleglow asked Al Jazira to pay the first £1,805,136.99 of the "consultancy".

This exact amount is paid, but not by Al Jazira. The payment came from Manchester City, authorised by its head of finance:

And then, when Mr Mancini's lawyer sought to renegotiate elements of the consultancy contract, she did not write to Al Jazira. She wrote to City's chief executive, Garry Cook. He was clear the consultancy was all part of Mr Mancini's overall compensation

So this was all a sham. The consultancy's only purpose was to funnel money to Mr Mancini which Manchester City pretended was not from Manchester City and its owner. That was the Commission's conclusion:

Now the tax. Mr Mancini was, I assume, fully taxed on his income under his main contract with Manchester City. PAYE income tax and NICs. The usual. The position for Mr Mancini's consultancy agreement should have been the same.

You can't magically make a salary untaxed by calling it a consultancy fee. If the payments were really for Mr Mancini's work at Manchester City, they were employment earnings and should have been taxed in the usual way. (A leading case involves a certain Peter Shilton)

It doesn't matter who made the payment under the consultancy agreement, or which person/company received it. It was Mr Mancini's earnings, and the club should have put it through payroll. (Another leading case involves a certain Scottish club)

There should therefore have been UK tax. About £12m (because the wages were "net"). Manchester City should have applied PAYE/NI to its payments to Mr Mancini under the consultancy agreement in exactly the same way as under his main employment contract.

It seems likely that it did not. Several reasons: 1. The leaked correspondence discusses UK tax on the "normal" employment contract but not on the consultancy agreement. Only Italian tax is mentioned.

2. Italian tax shouldn't be relevant to the consultancy agreement. He was - in reality - an employee of Man City. UK tax primarily in point here. Italian tax is relevant only in the make-believe world where this was a real consultancy contract.

3. UK tax: would have undone the pretence. PAYE only applies to an employee's pay. Operating it would have been an admission that the consultancy fees were really Mr Mancini's salary from City.

4. I asked Man City if they'd accounted for UK tax properly. Normally people reply to this kind of thing saying something bland ("all laws were followed and there is no suggestion blah blah") Didn't even get a response.

So I think they didn't pay the £12m UK tax. I expect HMRC worked this out some time ago. But we can't know what happened. Did HMRC give up? Doubt it. Did City pay up? No sign of that in their accounts. Is an investigation still ongoing? Wouldn't surprise me.

HMRC could/should have been pursuing about £24m:

Was this tax evasion? Unpaid tax and tax evasion are not the same thing. Tax evasion involves a deliberate and dishonest attempt to evade tax, not merely an error or an unsuccessful legal argument.

The crucial legal question to determine whether a tax evasion offence was committed is whether the relevant personnel at City were "dishonest". The Commission found City deliberately concealed what was going on. But did they dishonestly fail to pay tax? Or was this an innocent mistake?

The highly irregular nature of the arrangement, and the Commission's findings of sham and intentional concealment, suggest to us that there should be a criminal investigation.

Disclosure: Manchester City is represented by law firm Clifford Chance LLP. I was a partner at Clifford Chance until 2022, but had no involvement in or knowledge of the case, and have at no time spoken to anyone at the firm regarding it.

Our full report, which goes into much more detail on the law and the facts: taxpolicy.org.uk/2026/10/01/man…

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