London HC hears tax fraud for Newcastle United

No reasonable grounds exist for believing Newcastle United FC engaged in a suspected tax fraud, two High Court judges have been told.

Club officials are challenging the seizure of documents by tax officials investigating the financial affairs of several football clubs.

St James’ Park and West Ham United’s ground were raided in April by HM Revenue and Customs (HMRC) as part of a probe into suspected income tax and national insurance fraud.

Newcastle’s managing director Lee Charnley was among a number of senior European football officials arrested and later released without charge.

The club is challenging the legality of the search-and-seize orders obtained by HM Revenue and Customs as part of a National Insurance fraud investigation, as a draconian step which was “intrusive and interferes with the liberty of the subject”.

The hearing at London’s High Court is expected to last two days.

Richard Lissack QC, appearing for NUFC, said the warrants were “excessively wide,” adding: “There were no reasonable grounds for believing Newcastle was engaged in suspected tax fraud.” Further,  also argued that the failure of the judge who granted the warrants to give reasons “should on its own lead to the warrants being quashed”.

The QC told Lord Justice Beatson and Mrs Justice Whipple, sitting in London, the warrants were also unnecessary because other methods were available for obtaining information.

It was also argued the legal procedures followed when the warrants were obtained at Leeds Crown Court were flawed, and no proper reasons were given. Inaccurate and incomplete disclosure had also been given to the crown court, said Mr Lissack.

During the raids, business and financial records were seized as well as computers and mobile phones belonging to the club, who recently secured promotion to the Premier League.

The HMRC investigation centres on football agents and payments made in transfer dealings between English and French clubs. It has confirmed the French authorities are assisting the UK investigation.

Court orders are preventing HMRC officers from examining the seized material pending the outcome of the club’s two-day application for judicial review.