UK tax authorities opened a civil investigation into Manchester City’s tax affairs in 2018, following the release of a series of leaked internal emails that raised questions about the club’s use of complex financial arrangements. The investigation came nearly a decade before the club was found to have breached Premier League financial regulations.
HM Revenue & Customs (HMRC) initiated the inquiry under a Code of Practice 8 (COP8) procedure, a civil investigation used when there is suspicion of intricate tax avoidance structures, but not necessarily deliberate fraud. Sources familiar with the matter said the inquiry was never formally closed and no enforcement action has been taken so far.
The leaked emails, published by Der Spiegel in 2018, triggered a parallel Premier League investigation focused on whether the club had manipulated its accounts by masking funding from Sheikh Mansour bin Zayed al-Nahyan, a member of Abu Dhabi’s ruling family and the club’s owner, as commercial revenue. In December 2018, the league began its formal inquiry into possible financial misconduct.
Last month, an independent commission appointed by the Premier League found that Manchester City had artificially inflated its financial position by more than £900 million between 2009 and 2018 through so-called “sham” commercial deals. The commission ruled the club guilty of 114 out of 115 charges related to breaches of financial rules.
In response, Manchester City lodged an appeal, arguing that the commission’s findings contained “clear material errors of law, principle, and fact” and describing the opinion as “unsafe.”
According to sources, the club engaged legal advisors to assist with the HMRC investigation, maintaining that its financial arrangements were legitimate. Both Manchester City and HMRC declined to comment on the ongoing inquiry.
Officials in the UK government anticipate that the revelations from the Premier League case will likely increase HMRC’s interest and scrutiny of the club’s tax affairs. A senior minister described it as “inevitable” that the tax authority would review the allegations.
Dan Neidle, a former head of tax at Clifford Chance law firm and one of the experts representing Manchester City in the Premier League proceedings, analyzed the leaked documents and estimated that the club may have underpaid around £12 million in tax as a result of the financial arrangements.
The case highlights the complex intersection between regulatory oversight in sports governance and tax enforcement, with Manchester City’s financial practices under multi-faceted examination amid broader discussions on transparency and compliance in football.