Post by QPR Report on Mar 27, 2010 22:49:22 GMT
Mail
Portsmouth hit by new tax evasion claim
EXCLUSIVE By Daniel King 27th March 2010
Police and tax officials are investigating another allegation of tax evasion at Premier League crisis club Portsmouth.
City of London police and HM Revenue and Customs refused to confirm reports that a man had been arrested at his home on Thursday morning. Other sources confirmed the individual had been spoken to, although not charged.
A Portsmouth spokesman said last night: 'We do not feel it appropriate to comment until the police investigation has been concluded.'
The new strand of the long-running investigation is believed to relate to £550,000 which Portsmouth paid into the Swiss bank account of a company registered in the British Virgin Islands. A former club employee contacted police in 2008 and claimed that the money was paid in that way to avoid tax being incurred on a severance payment to an overseas player who had left the club.
Portsmouth have told The Mail on Sunday that the £550,000 was for professional services, including scouting, to be provided by the player and so was not subject to tax.
But in an internal email, a former club director said he was told to set up a company in the British Virgin Islands to receive 'full and final settlement' of the player's contract after he and the club had decided to go their separate ways. If the £550,000 was a taxable severance settlement, HMRC should have received more than £200,000.
Former Portsmouth manager Harry Redknapp, ex-chief executive Peter Storrie and former owner Milan Mandaric have all been charged with tax evasion as part of the longrunning joint investigation by police and the tax authorities.
They deny any wrongdoing. Portsmouth have claimed previously that any agreement with the overseas player involved in the new inquiry had been approved by lawyers and the club were confident there were no tax issues.
The club confirmed that a fee had been paid to a company called Medellin Enterprises Ltd 'for the release of [the player's] registration and for ongoing professional services'.
They said the money was to meet Medellin's professional fees not only for negotiating the player's release but also for other services, including scouting and working with foreign coaches.
But an email sent by a former Portsmouth director and seen by The Mail on Sunday gives a different explanation of the payments.
Accountant Keith Grissett, who was an adviser to the club and on the board for two months in 2005, had been asked by club officials preparing accounts for further explanation of the payment to Medellin. In his reply, Grissett wrote: 'My instruction was to set up an offshore company for [the player], which would receive his settlement. If that could be effected (and it was), [the player] would accept a considerably lower settlement. The reduced settlement figure was for £550,000 sterling, payable in three instalments.'
The Mail on Sunday has also seen a copy of an invoice submitted to Portsmouth by Medellin Enterprises Ltd, which has a PO Box address in Tortola, capital of the British Virgin Islands.
It asks for three payments, corresponding to the sums and dates detailed by Grissett's email, which are to be made into an account in Medellin's name at Bank Leumi in Switzerland. But the invoice makes no mention of scouting services or working with foreign coaches.
The £550,000 - 'strictly net' - is to be paid in consideration of 'professional fees and all costs in respect of negotiating the release of [the player] from his contract with the Football Club and cancellation thereof without further penalty or cost to either party'.
It is believed that the player concerned was earning between £15,000 and £20,000 per week, so it would have cost Portsmouth up to £1.5 million to pay up the remaining 18 months of his contract in full. Paying him £550,000 would have represented a considerable saving.
Grissett's email also makes reference to a letter faxed by the player to Portsmouth. The letter, seen by The Mail on Sunday, read: 'Following our discussions, I confirm I have instructed Medellin Enterprises Limited to negotiate with you on my behalf for the early release of my contract with the Club. I also confirm that any agreement that is reached, will be in full and final settlement of my contract with the Club.'
Read more: www.dailymail.co.uk/sport/football/article-1261261/Portsmouth-hit-new-tax-evasion-claim.html?ITO=1490#ixzz0jQ6Zbb6C
Portsmouth hit by new tax evasion claim
EXCLUSIVE By Daniel King 27th March 2010
Police and tax officials are investigating another allegation of tax evasion at Premier League crisis club Portsmouth.
City of London police and HM Revenue and Customs refused to confirm reports that a man had been arrested at his home on Thursday morning. Other sources confirmed the individual had been spoken to, although not charged.
A Portsmouth spokesman said last night: 'We do not feel it appropriate to comment until the police investigation has been concluded.'
The new strand of the long-running investigation is believed to relate to £550,000 which Portsmouth paid into the Swiss bank account of a company registered in the British Virgin Islands. A former club employee contacted police in 2008 and claimed that the money was paid in that way to avoid tax being incurred on a severance payment to an overseas player who had left the club.
Portsmouth have told The Mail on Sunday that the £550,000 was for professional services, including scouting, to be provided by the player and so was not subject to tax.
But in an internal email, a former club director said he was told to set up a company in the British Virgin Islands to receive 'full and final settlement' of the player's contract after he and the club had decided to go their separate ways. If the £550,000 was a taxable severance settlement, HMRC should have received more than £200,000.
Former Portsmouth manager Harry Redknapp, ex-chief executive Peter Storrie and former owner Milan Mandaric have all been charged with tax evasion as part of the longrunning joint investigation by police and the tax authorities.
They deny any wrongdoing. Portsmouth have claimed previously that any agreement with the overseas player involved in the new inquiry had been approved by lawyers and the club were confident there were no tax issues.
The club confirmed that a fee had been paid to a company called Medellin Enterprises Ltd 'for the release of [the player's] registration and for ongoing professional services'.
They said the money was to meet Medellin's professional fees not only for negotiating the player's release but also for other services, including scouting and working with foreign coaches.
But an email sent by a former Portsmouth director and seen by The Mail on Sunday gives a different explanation of the payments.
Accountant Keith Grissett, who was an adviser to the club and on the board for two months in 2005, had been asked by club officials preparing accounts for further explanation of the payment to Medellin. In his reply, Grissett wrote: 'My instruction was to set up an offshore company for [the player], which would receive his settlement. If that could be effected (and it was), [the player] would accept a considerably lower settlement. The reduced settlement figure was for £550,000 sterling, payable in three instalments.'
The Mail on Sunday has also seen a copy of an invoice submitted to Portsmouth by Medellin Enterprises Ltd, which has a PO Box address in Tortola, capital of the British Virgin Islands.
It asks for three payments, corresponding to the sums and dates detailed by Grissett's email, which are to be made into an account in Medellin's name at Bank Leumi in Switzerland. But the invoice makes no mention of scouting services or working with foreign coaches.
The £550,000 - 'strictly net' - is to be paid in consideration of 'professional fees and all costs in respect of negotiating the release of [the player] from his contract with the Football Club and cancellation thereof without further penalty or cost to either party'.
It is believed that the player concerned was earning between £15,000 and £20,000 per week, so it would have cost Portsmouth up to £1.5 million to pay up the remaining 18 months of his contract in full. Paying him £550,000 would have represented a considerable saving.
Grissett's email also makes reference to a letter faxed by the player to Portsmouth. The letter, seen by The Mail on Sunday, read: 'Following our discussions, I confirm I have instructed Medellin Enterprises Limited to negotiate with you on my behalf for the early release of my contract with the Club. I also confirm that any agreement that is reached, will be in full and final settlement of my contract with the Club.'
Read more: www.dailymail.co.uk/sport/football/article-1261261/Portsmouth-hit-new-tax-evasion-claim.html?ITO=1490#ixzz0jQ6Zbb6C
