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HMRC opened 'sham deals' tax probe into Manchester City back in 2018

HM Revenue and Customs launched a civil investigation into Manchester City in 2018 over suspected complex tax arrangements, the Financial Times reports — nearly a decade before an independent commission found the club guilty of artificially inflating finances by more than £900m.

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HMRC opened 'sham deals' tax probe into Manchester City back in 2018
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HM Revenue and Customs opened a civil investigation into Manchester City in 2018 to establish whether the club had used elaborate financial arrangements to avoid tax, the Financial Times has reported. The inquiry pre-dates by almost a decade the independent commission verdict that found City guilty of breaching Premier League financial rules.

The HMRC probe was triggered by a cache of internal club emails leaked by Der Spiegel in November 2018 — the same leak that prompted the Premier League to launch its own investigation the following month. HMRC conducted the inquiry under what is known as a Code of Practice 8 framework, a civil mechanism used when authorities suspect complex structures have been employed to circumvent tax obligations. COP8 investigations do not involve allegations of deliberate fraud.

City enlisted external lawyers to advise on the probe and maintained to HMRC that there was nothing improper about its commercial arrangements. The Financial Times reports that the inquiry was never formally concluded and that HMRC has not pursued any action. Both Manchester City and HMRC declined to comment.

The revelation emerges just a week after Dame Meg Hillier, Chair of the Treasury Select Committee, wrote to HMRC permanent secretary John-Paul Marks requesting reassurance that he understood “the importance” of the Premier League’s investigation into the club.

The independent commission’s findings, published last month, concluded that City had artificially inflated their finances by more than £900m between 2009 and 2018 through so-called ‘sham’ commercial deals — arrangements that concealed direct funding from owner Sheikh Mansour bin Zayed al-Nahyan by disguising it as commercial revenue. City were convicted on all but one of the Premier League’s charges following a probe spanning nearly ten years.

The club strenuously denies the allegations and formally lodged a comprehensive appeal on Thursday 1 October 2026, ahead of the Friday deadline.

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