Newcastle United have been ordered to pay £3.2m by HM Revenue and Customs (HMRC) after topping the tax authority’s list of deliberate tax defaulters. The demand relates to financial irregularities during player transfers between April 2010 and April 2016 under former owner Mike Ashley.
The penalty, disclosed in HMRC documents released on Thursday, comprises £1.9m in unpaid tax and a £1.25m fine. The defaults stem from “Operation Loom,” a long-running investigation into the club’s transfer dealings and agents’ fees.
Operation Loom and Historical Allegations
HMRC officers raided St James’ Park in 2017 as part of the probe, which examined allegations that the club “systemically abused” the tax system. Investigators claimed Newcastle used “sham” contracts to disguise payments, avoiding income tax, VAT and national insurance contributions on player transfers and agent payments.
According to court papers from the time, the investigation focused on an elaborate scheme designed to avoid tax obligations. HMRC stated the alleged arrangements breached Football Association agents’ regulations and occurred with the “full knowledge” of the club during Ashley’s ownership.
The defaults took place between April 2010 and April 2016, shortly before the 2017 raid. While HMRC discontinued its criminal investigation in 2021 without laying charges, it continued civil proceedings due to what it described as “tax non-compliance of a serious nature.”
Civil Settlement and Former Owner’s Defence
The club’s current owners, Saudi Arabia’s Public Investment Fund (PIF), who acquired Newcastle in 2021, have reached a civil settlement with HMRC to resolve the historical liabilities. Both the club and the tax authority declined to comment publicly on the specific details behind the defaulter listing.
A spokesperson for St James Holdings Ltd, speaking on behalf of Ashley, contested the deliberate default designation. “HMRC discontinued their criminal investigation prior to any charges being made,” the spokesperson said. “There was no finding of deliberate conduct by a Court or Tribunal and no admission of deliberate conduct was made to HMRC.”
The £3.2m demand places Newcastle at the summit of HMRC’s published league table of deliberate defaulters, marking an embarrassing postscript to the Ashley era as the club continues its transformation under new ownership.