Former Chelsea footballer Craig Burley ordered to pay £466,000 to HMRC
Scottish former footballer and current ESPN pundit Craig Burley has been ordered by the Tax Tribunal to pay HMRC nearly £466,000 in unpaid income tax.
Burley, who started his career at Chelsea FC, was sold to Celtic in 1997 for £2.5m before moving to Derby County. He also played for Scotland, representing his country at the UEFA Euro 1996 and in the 1998 FIFA World Cup.
He is currently a pundit on the ESPN FC programme.
He invested in two ‘film schemes‘, Bothwell Media I and Bothwell Media II, which generated profits after initial losses. To fund his investment, he had taken out loans from banks, with the partnerships’ income being paid directly to the lenders to discharge his liabilities.
Regarding the tax liabilities on profits, he sought to assign his interest to a limited liability partnership (LLP) of which he was a member. The other member of the LLP, a company called Craig Burley Limited, which he argued was entitled to the profits and would be taxed at a lower corporate rate.
However, HMRC disagreed with his position and issued him five closure notices charging him nearly £466,000 in income tax for the tax years 2010/11, 2011/12, 2014/15, 2015/16, and 2016/17.
Burley appealed to the First-Tier Tribunal, which held a hearing in early June before Judge Mark Baldwin and Mr. John Agboola.
The Tribunal, which ruled last Thursday, sided with HMRC and dismissed Burley’s appeal. The judgment concluded that he remained entitled to his share of the partnership’s profits, and therefore, HMRC’s closure notices were correct.
“HMRC’s pursuit of sports stars’ tax misdemeanours continues with Craig Burley,” stated Rebecca Seeley Harris, expert at Re:Legal Consulting. She added, “HMRC now has 5,500 more tax officers to help close the tax gap, so compliance is going to get tougher”.
Back in March, former Liverpool player and Sky Sports pundit Phil Thompson was ordered to pay HMRC nearly £300,000 after losing an appeal related to IR35 rules.
A HMRC spokesperson said: “We welcome the tribunal’s decision, which shows that attempts to circumvent partnerships’ tax obligations don’t work.”