Manchester City face HMRC questions after Parliament demands tax inquiry

Parliament has asked Britain's tax authority to examine whether Manchester City breached UK tax rules, following an independent commission's finding that the club committed more than 100 breaches of Premier League regulations.

Dame Meg Hillier, chair of the cross-party Treasury Committee, wrote on Thursday to HM Revenue and Customs permanent secretary JP Marks to ask whether the department has obtained an unredacted copy of the commission's 40-page ruling and whether it is investigating the tax consequences.

The inquiry comes days after the Premier League confirmed that an independent panel found City guilty of systematic financial rule-breaking between the 2009-10 and 2017-18 seasons. The panel found the club used sham sponsorship arrangements and off-the-books remuneration agreements to disguise liabilities and inflate revenue by more than £900m over nearly a decade.

What Parliament is asking HMRC

In her letter, Hillier cited excerpts from the commission's core decision detailing how payments made to staff were omitted from normal employment contracts and instead routed through separate consultancy agreements. The commission concluded that those arrangements did not reflect the true economic substance of the work and were designed to hide liabilities.

Hillier pressed HMRC to explain whether it was aware of the findings before publication, whether officials have sought the underlying unredacted documentation, and what assessments have been made regarding tax avoidance. While noting that taxpayer confidentiality restricts what HMRC can disclose about individual cases, she urged the tax authority to demonstrate that it is seized of the matter's clear public interest.

The committee chair also requested a broader briefing on HMRC's work across professional football, asking what common issues inspectors encounter regarding player and executive pay.

Off-book pay and sponsorship schemes

The parliamentary intervention follows an analysis published this week by the independent group Tax Policy Associates, which estimated that City could owe up to £12m in unpaid income tax and National Insurance contributions relating to secret contractual arrangements for former manager Roberto Mancini. The group estimated that potential penalties could double that liability to £24m.

At the Premier League hearing, the commission found that City's owners, the Abu Dhabi United Group, ran a disguised funding scheme worth £830.69m to top up commercial deals while masking the source of the capital. City had argued that sponsor funds came legitimately from Abu Dhabi state entities rather than their owner's private company, but the panel rejected that defense as a concoction devised after the fact.

What happens next

City have maintained their innocence throughout the proceedings and said the panel's decision contained clear material errors of law and fact. The club faces an immediate deadline on Friday to lodge a formal appeal.

HMRC possesses legal powers to open past corporate tax returns, disregard artificial transactions, and assess financial penalties where taxable remuneration has been disguised or underreported.

Hillier has instructed HMRC to respond in writing by Thursday 15 October 2026, when both her letter and the tax authority's response will be published openly.