Year of silence prevents football clubs’ aim for transparency

The Guardian, and more specifically, the brilliant David Conn, released an exclusive story about the ‘Kick It Out’ campaign slamming top football clubs for a ‘year wasted in hypocrisy’.

The esteemed chairman of Kick It Out, Lord Ouseley launched a damaging verdict of vicious situations resulting from racial fallouts in professional football, and the inability of the governing bodies, the clubs themselves and the players to react such allegations and accusations.

It was hardly surprising that Lord Ouseley criticised the lack of ‘leadership’ and ‘morality’ shown from the above and the initial lack of urgency to deal with the racial virus affecting football is utterly ridiculous.

In the aftermath, Chelsea and ex-England captain John Terry was charged with using racial language was still able to participate in Euro 2012, and lead his club side for a year without any action. His four match ban was laughable, and a disgrace to those who want to eradicate these demons from the game.

Liverpool, too, were guilty of pleading needless support to Luis Suarez when he was found to use racial language towards Partice Evra. Despite cultural misunderstandings, something pointed out by David Bond at the BBC, he was rightly punished and missed a good portion of Liverpool’s struggle last season – was it enough?

It was clear that these clubs were intent on protecting their most valuable “assets” despite their racial actions, which, in any other workplace, would have resulted in suspension and then, the sack.

What’s so different about football? These clubs and multi-million pound machines, relying on their “assets” to provide the foundation for the riches professional sport brings. These players appear to be bigger than the “organisation” itself.

The old case of the “individual” against the “organisation” is clear. Transparency, however how much we crave it, will never transpire in a business that is solely focused on the field. Clubs and the industry need to decide what’s bigger? The player or the organisation.

No one, as of yet, has made a moral-stance in protecting the greater good of the game. The PFA chairman Gordon Taylor spoke about introducing safety nets to protect players from the small minority of fans who stupidly throw objects, but he fails to recognise the bigger safety fears and possible precautions from not dealing with these gross misconduct on the field. These are role models and leaders in sport. Their actions are seen worldwide by millions, and allowing major offences, like racism, to go unpunished (which a four-match ban is) is truly disrespectful everyone.

“Leadership is so important; you have to send a powerful message that racism is completely unacceptable,” Lord Ouseley told the Guardian. “But there is a moral vacuum. The big clubs look after their players as assets. There was no bold attitude from them, to say that they would not put up with it.”

The lack of clear leadership at these times show that football is an industry catching up. The PR-fails of Liverpool (Suarez t-shirts, for one) show that there is too much inward focus in terms of communication and leadership, and much infatuation about dealing with the club rather than the industry. The FA needs to protect the game, but clubs have to be singing of the same song sheet.

It will be good to see these “assets” would last more damaging accusations. Chelsea sacked Adrian Mutu for taking recreational drugs, Rio Ferdinand was suspended for a year for missing a drugs test, Kolo Toure was banned for taking diet pills, but no one yet, big professional club or governing body, has taken decisive action against clear acts of racism.

Sheffield United sacked Ched Evans after the striker was charged with sexual assault. Lee Hughes’s career was put on hold for three years after he was imprisoned for causing death by dangerous driving and was released by his club West Brom. These are small signs of leadership after very serious offences. Racism should fit in this category.

Players should report every encounter of racism suffered, but if those accused of being racist are to be found guilty, they should be banned for a year. At least. Not by the governing body, but by the clubs – that would show some real leadership and would communicate more openly that these awful acts of racism will not be tolerated, whether you are deemed as a “valuable” asset or not.

Steven Woodgate

Tax Avoidance – A Question of Morality?

First it was Jimmy Carr and the comedians, then it was Starbucks, Amazon & Google and now Premier League football clubs have been reported to be avoiding paying corporation tax. The public up roar and the media interest has led many to believe that avoiding tax is criminal, however it is not and it is important to make a clear distinction between tax evasion and tax avoidance

Tax evasion is in quite simply unlawful and can expose the taxpayer to penalties. Examples include giving inaccurate information or describing a transaction as something different from what it really is. It is basically a form of deception.

Tax Avoidance however has developed over a number of years in to what we have today in artificial schemes by which a sequence of transactions is undertaken for the sole purpose of mitigating a tax burden much like what has been reported in the media.

I have taken a quote from the judge in the tax case Duke of Westminster 35 that perhaps sums it up the best “A taxpayer may have a choice between two or more alternative methods of achieving a desired result. He is entitled to select the method, if lawful which avoids altogether or reduces the tax he would pay on another alternative. He is not to be taxed on the basis that a more normal method would attract a heavier tax burden. The selection of a tax effective method is called tax avoidance”

It is hard to stomach that Premier League Clubs such as Manchester United, Tottenham Hotspur and Newcastle United paid no tax on a combined surplus of £70m. The Independent reported that more than £150m of profits were made by Premier League clubs yet only £3m in corporation tax was paid an effective rate of 2% tax. You may ask yourself how the clubs are managing to do this.

Legally and with effective use of the accounting system Premier League football clubs have been able to reduce their corporation tax by offsetting profits against prior year losses. Furthermore the reduction in corporation tax from 28 down to 24 per cent has seen tax bills lower further. Clubs are also able to make great use of player transfer fees as these can be written off over the period of a player contract this could lead to an amount of deferred tax. This is slightly different to the tax avoidance which has been implemented by the likes of Starbucks however it goes to show the ease of a company to avoid paying corporation tax in full.

The question for many is not whether it is illegal it is a question or morality is it right that these profitable football clubs should be paying very little or no corporation tax. My view is simple. It is not the clubs fault; it is the fault of the government and HMRC are they making it too easy for companies to avoid tax? UK Tax legislation is extremely vast and complicated; there is many a loop hole which has been taken advantage of. Tax avoidance is legal and as long as it is legal companies (including football clubs) will be doing all they can to pay as little corporation tax as possible and let’s not forgot these football clubs do pay other taxes such as PAYE and National Insurance.

The government and HMRC need to have a thorough review of corporation tax and how this is structured. It has been reported that in tomorrow’s autumn statement the Chancellor will be announcing a large clamp down on tax avoidance. Reports of naming and shaming tax dodgers could be seen as one way to stop a few from avoiding tax but this leads to the question does bring the integrity of our tax system into light. I think we need to work closely with HMRC, provide larger resources in totally reforming the corporation tax system and dare I say it even abolishing it completely!

Mitch Young

Follow me on my blog or on Twitter @MitchTheTaxMan