UK tax authority has investigated Manchester City's tax structures since 2018
Britain's tax authority opened an investigation into Manchester City in 2018 to determine whether the club used complex structures to lower its tax bill. The probe began after internal emails were published by Der Spiegel and has never been formally closed, although no action has been taken against the club so far.
ByNatilla5 min read
The United Kingdom's tax authority has kept an open investigation into Manchester City since 2018 to establish whether the club resorted to complex corporate structures in order to reduce its tax obligations. The probe, revealed on Wednesday by the Financial Times, began shortly after German weekly Der Spiegel published a series of internal club emails.
- The tax investigation began in 2018 following the leaks published by Der Spiegel.
- The focus is on complex structures used to reduce taxes, not on deliberate fraud.
- The file was never formally closed and no action has been taken against the club.
- Manchester City was already found guilty of breaching Premier League financial rules between 2009 and 2018.
- The club has appealed that decision and maintains its innocence.
What the UK tax authority has been looking into since 2018
According to people familiar with the matter cited by the financial newspaper, Britain's tax office —known by its acronym HMRC— opened proceedings to determine whether Manchester City designed corporate mechanisms aimed at minimising tax payments. The starting point was the release, in late 2018, of a batch of internal club emails by Der Spiegel.
The sources consulted say the investigation does not point to possible deliberate tax fraud. Instead, it focuses on whether the structures used by the club complied with existing regulations or sought to erode the tax base through legally questionable formulas.
A case that remains open with no penalties imposed
The HMRC file has never been formally closed. To date, the tax authority has not imposed any sanction on the Premier League champions nor communicated the opening of a disciplinary procedure. The confidentiality protecting taxpayers has prevented further details about the current status of the inquiry from emerging.
The UK tax authority has taken no action against Manchester City and the investigation remains formally open, according to the Financial Times sources.
Asked by AFP, HMRC declined to comment, shielding itself behind the tax secrecy that protects taxpayer information. The club, for its part, had not responded to the agency's questions by Wednesday morning.
Manchester City and the shadow of financial fair play
This tax investigation adds to the earthquake that shook European football in late September, when an independent commission found Manchester City guilty of serious breaches of Premier League financial rules during the period from 2009 to 2018. The ruling dealt a major blow to the sporting project led by Pep Guardiola.
The club, owned since 2008 by Sheikh Mansour bin Zayed Al Nahyan, a member of Abu Dhabi's ruling family, flatly rejects the commission's conclusions. The entity maintains its innocence and has already filed an appeal against a decision that, if upheld, could carry far-reaching sporting and economic consequences.
The Der Spiegel publication that changed everything
The emails released by Der Spiegel in late 2018 were part of a massive document leak known as Football Leaks. Those revelations cast doubt on Manchester City's financing mechanisms and its relationship with entities linked to Abu Dhabi, and served as the basis for both the UK tax investigation and the subsequent case opened by the Premier League.
The club has consistently argued that the documents were taken out of context and that its accounts fully comply with the law. However, the independent Premier League commission reached a different conclusion, at least regarding the competition's financial control rules.
What is at stake for Manchester City in the appeal
The appeal filed by Manchester City against the independent commission's ruling is currently the club's main legal battleground. If the appeal succeeds, the club would be cleared of the accusations regarding accounting manipulation and breaches of domestic financial fair play. If it fails, the club faces sanctions that could range from heavy fines to point deductions, and even relegation in the most extreme scenarios.
The tax investigation by HMRC, although separate from the sporting proceedings, adds another layer of pressure on the club's owners. That said, the fact that it has not resulted in sanctions after more than five years suggests the tax case could remain dormant, at least for now.
Frequently asked questions
Why is the UK tax authority investigating Manchester City?
Britain's tax authority opened an investigation in 2018 to check whether the club used complex corporate structures aimed at reducing its tax bill. The probe began after internal club emails were published by German weekly Der Spiegel.
Has Manchester City been sanctioned by HMRC?
No. The investigation has never been formally closed and HMRC has not imposed any penalty on the club. The inquiry is also not focused on potential deliberate fraud, but on the design of the tax structures used.
How is this investigation related to the Premier League case?
Both proceedings stem from the same Football Leaks disclosures published in 2018. The Premier League found Manchester City guilty of serious breaches of its financial rules between 2009 and 2018, a decision the club has appealed and which remains pending resolution.