Newcastle United and West Ham raided in HMRC tax fraud investigation

• Newcastle managing director Lee Charnley released after HMRC investigation
• Offices at St James’ Park and club training ground raided by tax authorities

The offices of Newcastle United and West Ham United were raided on Wednesday morning and Chelsea confirmed they were asked to provide information as part of a wide-ranging HM Revenue and Customs investigation into suspected criminal tax fraud in professional football in England and France.

Newcastle’s managing director, Lee Charnley, was one of several men arrested in connection with the investigation, just two days after he was at the centre of triumphant scenes at St James’ Park when Rafael Benítez’s team secured promotion to the Premier League.

Charnley’s home, as well as Newcastle’s Darsley Park training ground, were raided by HMRC officials seeking documentation related to the investigation. The 39-year-old was later released without charge.

The UK’s tax authority shocked the football world with an early-morning announcement which stated: “HMRC has arrested several men working within the professional football industry for a suspected £5m income tax and national insurance fraud. One hundred and eighty HMRC officers have been deployed across the UK and France today. Investigators have searched a number of premises in the north-east and south-east of England and arrested the men and also seized business records, financial records, computers and mobile phones. The French authorities are assisting the UK investigation, have made arrests and several locations have been searched in France.”

The announcement and raids sparked a churn of speculation about who the targets were but HMRC, as is its policy, did not identify any individuals or organisations which are the focus of the investigation. No further comment was made beyond the initial statement.

In a statement, the Parquet National Financier, a French judicial body dedicated to prosecuting major financial crimes, said that four unnamed people had been taken into custody and 10 locations searched throughout France, with documents seized. The PNF said it had acted following a request for legal assistance from British authorities in July last year, and that the investigation is focused on suspected tax fraud and tax evasion committed in “several transfers of footballers from French clubs to clubs playing in the Premier League”. The statement said that HMRC’s suspicion is that illicit payments to players, agents or third parties enabled them to evade income tax and national insurance.

Lucrative transfer deals between French and English clubs have become increasingly frequent in the Premier League era, and Newcastle United in particular have been noted for signing a series of players from French clubs. Around 50 HMRC officials are understood to have arrived at West Ham’s London Stadium home early on Wednesday and sought entry to the club’s offices, where they were given access to documentation. West Ham staff provided paper copies of documents in compliance with the requests, and no computers were removed from the premises, according to club sources.

In an official statement West Ham said: “The club is cooperating fully with HMRC to assist their inquiries. No further comment will be made at this time.”

Newcastle also released a brief statement later in the day that confirmed “a member of its staff has this morning been assisting HMRC with their inquiries”.

Chelsea were visited later in the morning by HMRC officials, who turned up at the main Stamford Bridge offices requesting documentation. Club sources drew a distinction between the nature of that engagement with the tax authority and the raids at West Ham and Newcastle, suggesting that Chelsea have been asked to help with inquiries and the club is not the subject of the investigation itself. Detailed questions are understood to have been asked about various transactions and club staff handed over documentation as requested, with the club indicating that this related to the investigation of individuals or organisations outside Chelsea. No computers were seized at Stamford Bridge either.

In its statement, Chelsea said: “In connection with its wider investigation, HMRC has requested certain information which the club will provide.”

The Premier League has made a virtue of the large amount of money its clubs pay in tax, principally PAYE on massive players’ wages, during its recent boom years, as criticism has grown of high ticket prices, the inequality between clubs and other financial issues. In a report highlighted by the league the consultants Ernst & Young calculated that the league and its 20 clubs contributed £2.4bn in tax during the 2013-14 season, a point frequently made when highlighting the league’s benefits to the government. However, HMRC is known to have been conducting wide-ranging investigations into the tax affairs of football clubs for years, particularly into the tax paid on multimillion-pound transfers and image rights deals.

As public attitudes have hardened against tax avoidance and evasion more generally, particularly by very wealthy corporations or industries, HMRC is understood to have stepped up its efforts to investigate tax payments in football. In December HMRC’s chief executive, Jon Thompson, told parliament’s public accounts committee that investigations were continuing into 43 players, eight agents and 12 clubs relating to image rights payments.

In a statement then, the tax authority told the Guardian: “HMRC has been successfully tackling tax risks in the football industry. In recent years we have identified more than £80m in additional tax payable from club, players and agents.”

HMRC used its high-profile announcement of arrests and raids in football to send a general warning: “This criminal investigation sends a clear message that, whoever you are, if you commit tax fraud you can expect to face the consequences.”