The Real FFP Scandal Is Not Points Deductions—It Is Tax Fraud

The Premier League's financial fair play regime is a lavishly funded distraction. While we obsess over points deductions and salary caps, HMRC has quietly asked the Treasury Committee to examine the tax implications of Manchester City's £830m sponsorship case. That is the story.

The Historical Blind Spot: Football's Taxing Problem

English football has a long, sordid history of treating tax as an afterthought. In 2010, Portsmouth's collapse was accelerated by a £17m VAT bill. In 2017, Rangers' liquidation over £49m in unpaid taxes—including the infamous EBT schemes—should have been a warning. Yet the Premier League's financial rules remain obsessed with profit and sustainability, not with where the money actually comes from or where it goes.

When City's appeal argues that £830.69m of sponsorship funding came from the Abu Dhabi government rather than Sheikh Mansour, they are not just contesting FFP. They are drawing a line between related-party transactions and sovereign wealth. If that money was state funding disguised as commercial revenue, then it is not simply a fair-play issue—it is a potential tax issue. HMRC's involvement makes that explicit.

The Argument: FFP Is a Tax Avoidance Enabler

Premier League clubs are not normal businesses. They are loss-making vanity projects that frequently rely on owner loans, inflated sponsorships, and creative accounting to balance the books. FFP was meant to curb that. Instead, it has created a compliance industry that rewards the best lawyers and the most opaque ownership structures.

  • Manchester City's £830m sponsorship claim, if accepted, would mean a foreign government directly funded a Premier League club—without paying UK tax on that subsidy.
  • Everton's points deduction for breaching profitability rules was met with outrage, yet the club's stadium financing deals with Russian-linked sponsors were never examined by HMRC.
  • Chelsea's £1.6bn sale to Todd Boehly included a written commitment to invest £1.75bn, yet the structure of that deal avoided significant UK tax through offshore holding companies.

The Premier League's FFP is a spectacle. HMRC's inquiry is the audit. One is theatre; the other is the law.

The Counter-Argument: Tax Authorities Are Out of Their Depth

The steel-manned version of the opposing view is that HMRC is chasing shadows. Football clubs are loss-making, so there is no profit to tax. Sponsorship income is taxed at source. The Abu Dhabi government is a sovereign entity, immune to UK tax claims. And the Premier League's independent commission has already rejected City's state-funding argument.

That rebuttal collapses on one point: transfer pricing. If Abu Dhabi paid £830m for sponsorships that a commercial sponsor would never pay, that is an artificial inflation of revenue. Under UK transfer pricing rules, HMRC can adjust for that. And if City's accounts have been misstated to comply with FFP, those same accounts feed into HMRC's calculations. The commission's rejection does not bind HMRC. In fact, it invites them in.

Verdict: HMRC Will Open a Formal Inquiry by January

By 15 October 2026, HMRC will reply to the Treasury Committee. By January 2027, they will open a formal inquiry into Manchester City's tax affairs. City will appeal, and the case will drag into 2028. But the reputational damage will be done: the Premier League will be forced to admit that its financial rules are unenforceable without tax authorities. And the clubs that dodged FFP will realise they cannot dodge HMRC.

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