Parliament calls on HMRC to review the tax angle

HMRC (His Majesty’s Revenue and Customs, the UK tax authority) is facing renewed pressure to examine the Manchester City case after the independent commission’s ruling. Dame Meg Hillier, chair of the cross-party Treasury Committee in the UK Parliament, wrote to the tax authority saying the matter was in the public interest and that the tax implications should be assessed closely.

The move follows the independent commission’s finding that Manchester City was responsible for charges related to breaches of Premier League financial regulations between the 2009-10 and 2017-18 seasons. The commission concluded that the club overstated income through some sponsorship deals backed by its owners and used arrangements to conceal the true scale of certain obligations.

The Treasury Committee asked HMRC specifically whether it had sought the redacted documents in the commission report. Hillier said she expected reassurance that the tax authority recognised the importance of those issues.

Figures point to the possible size of the liability

The most striking tax-related figure in the case came from an external report by Tax Policy Associates. According to the report, the club may have underpaid as much as 12 million pounds in tax because of a “fake” contract said to be linked to former manager Roberto Mancini.

That assessment also said the total liability could rise to 24 million pounds once penalties and additional income tax and national insurance contributions were added. The scale of the hidden funding arrangement alleged by the Premier League was put at 830.69 million pounds.

  • Possible underpaid tax: 12 million pounds
  • Potential total liability including penalties: 24 million pounds
  • Scale of the disputed hidden funding claim: 830.69 million pounds

Appeal process reopens debate over sponsorship funding

Manchester City continues to deny the allegations, and the club is understood to intend to file an appeal by Friday. In its defence, the club is expected to present evidence that the source of some major sponsorship agreements was the Abu Dhabi government rather than Abu Dhabi United Group within the ownership structure.

Premier League rules allow state-linked entities to sponsor clubs. However, the independent commission rejected that explanation and concluded it was intended to obscure the true nature of the hidden funding arrangement.

The financial impact of the case is not limited to tax risk. It has also triggered a fresh debate in UK sport finance over how sponsorship income is classified, how ownership-backed support is reported and how far regulatory scrutiny can reach at football clubs. The club’s main sponsor, Etihad Airways, has also said it is considering legal action, arguing that the published findings have damaged the company.