HMRC Targets Football Bosses Over Tax Fraud

by Jason Gorringe, Tax-News.com, London

07 November 2006

Two Boston United FC executives were on Friday given suspended jail sentences for tax fraud, after an 18-month investigation by HM Revenue and Customs (HMRC).

Former Chairman Patrick Malkinson, and current Manager Stephen Evans pleaded guilty to cheating the public revenue out of GBP245,188 by the fraudulent evasion of Pay As You Earn Income Tax and National Insurance Contributions over a four-year period.

The fraud involved dishonestly disguising salary and wage payments as untaxed, out of pocket expenses and the submission of false end of year tax returns for the years 1997 to 2001. As a result, the club was able to pay players and managers higher wages securing a competitive advantage over rival clubs.

Statements provided by players indicated the existence of undisclosed contracts, the existence of multiple contracts for the same players covering the same period containing different contractual terms, and the fact that the players had provided no records of mileage which could possibly found the basis for legitimate "reimbursement".

Malkinson was sentenced to two years imprisonment, suspended for two years, while Evans was sentenced to 12 months imprisonment, suspended for two years. In addition, the judge made a confiscation order for GBP349,587 against Malkinson, representing the fraudulent amount, plus interest. He must pay this within 12 months or serve three years in jail.

HMRC Group Director of London Criminal Investigation Graham Ranson observed on Friday that:

"The law says that tax and National Insurance must be deducted from employees' wages and the monies passed to HMRC. In this case wages were paid but disguised as expenses and by their actions Messrs Malkinson and Evans not only committed fraud but also achieved for Boston United an unfair advantage over other clubs who operated within the law."

"HMRC take a serious view of those who commit tax fraud and this case should serve as a deterrent to anyone considering such a course of conduct."

Recommended