Poor old Arsenal FC. If its current injury and contract problems were not bad enough, now it's been slapped with a £11 million back tax bill because of its offshore EBT arrangements. To add insult to injury (no pun intended), VAT want £700K on agents fees of £4 million. I recall seeing something on TV about how highly paid footballers were having it away through offshore settlements and thinking: "I'll bet they get nicked for that one." And so it has proven. At the time of the Ray Parlour divorce, which triggered the tax case:
"It was "discriminatory and wrong ", said the judge, for the earner - in this case, Ray Parlour - to have sole control over that surplus during the next four years."
It doesn't get more clear cut than that does it?
In my day, when considering offshoring we had to ensure that nothing commercial was done prior to making any offshore arrangements because to do so was putting steps in place that could be undermined by Inland Revenge.
Personally, I have little sympathy with highly rewarded players who are being done an extra 20%. They come to the UK, in part, to avoid their own high tax regimes. Even paying 40%, the French stars for instance are much better off than they would be 'back home' operating under normal French tax and social security laws.
No doubt the boys at KPMG will have services they can flog to help soften the blow. But is it really a hardship? The affected players could only defer tax in the first place - on the assumption they left monies offshore.
How will Arsenal pay the tax? Parlour is now playing for Middlesborough. Can it reclaim from the EBT's? How, without stirring up a shit storm with the players who entered into these arrangements in good faith? The club fears the ruling will prevent them from attracting new overseas players. I doubt it.