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Manchester United have received a huge blow with regard to their summer budget as reports of issues with tax payment surface.
HMRC are reportedly in talks with the club over unpaid taxes. The amount paid on arrangements with players and agents is in question, and the eventual outcome may greatly hamper the summer’s spending plans.
His Majesty’s Revenue & Customs (HMRC) is the national taxing authority of the United Kingdom that is responsible for direct and indirect taxes and administers benefits and tax credit payments to residents.
The amount in question is still unclear but if the club ends up having to pay a significant amount of money, it could surely hamper the summer transfer plans coupled with Premier League FFP rules.
The club was unable to significantly spend in January even after an injury-riddled first half of the season on account of FFP rules.
They managed to scrape away with balancing the books, but FFP combined with these fresh discussions with HMRC will definitely impact future budgeting and planning.
Manchester United are not the first club to fall victim to the commission’s activities as last year they collected £124.8m in unpaid taxes from Premier League clubs for the 2022/23 financial year.
“We will continue to carefully scrutinize arrangements between clubs, players and agents to ensure the correct tax is paid,” HMRC said at the time.
“We work closely with the football industry to educate and deal with tax risk head on,” they concluded.
Unpaid taxes have been a constant issue for HMRC for the past couple of years.
Tax Policy Associates, a non-profit company that aims to improve the public’s understanding of tax, claimed that HMRC had lost out on £470m from Premier League clubs between 2015 and 2021, due to avoiding VAT, income tax and national insurance on payments to agents.
HMRC are thought to be in talks with several clubs not just Man Utd about potential money owed.
