Former footballers claim ‘financial grooming' took them to ‘hell and back'
Politicians, campaigners and former footballers have protested at the 'financial grooming' of Premier League stars who claim they were persuaded to put their money into failed investment schemes that led to them being accused of tax avoidance and faced with enormous penalties from HM Revenue & Customs.
A host of peers, MPs, lawyers and experts in policing and tax laws gathered in Westminster on Monday night to hear from alleged victims of investment and pension fraud and their subsequent treatment by HMRC.
Related: More than 500 footballers may have lost up to £1bn due to bad advice
The launch of the investment fraud committee, an all‑party parliamentary group, featured harrowing testimony from several victims over the course of three hours and opened with a heavy focus on issues that are understood to have affected hundreds of former footballers. Sources said that many former players whose careers peaked in the 1990s have become unwell and struggled with their mental health because of their financial problems.
The former Manchester United and England striker Andy Cole, the former Leeds striker Brian Deane, the former Arsenal and Liverpool midfielder Michael Thomas and the former Liverpool and Fulham midfielder Danny Murphy were among those who attended the meeting.
Murphy, who has become a leading pundit for the BBC and TalkSport since his retirement, was hit with a £2.5m tax bill after investing in a film scheme that promised tax breaks to investors. The former England international lost a court case in 2019 over £1m he borrowed from the private bank Coutts to invest in the scheme.
Deane and Murphy have been at the forefront of the former players' response and have taken extensive guidance from Carly Barnes-Short, a lawyer who is co-chairing the IFC with the Conservative MP Sarah Bool. Barnes-Short spoke of a 'huge injustice' and said some footballers had been exploited during their playing careers by trusted financial advisers.
The campaigners argue it was wrong that footballers who invested in failed film schemes later received huge tax bills, penalties and demands for interest payments from HMRC. Comparisons were made with the Post Office Horizon scandal.
Murphy offered insight into how bad actors preyed on the naivety of young footballers. 'I couldn't think of a more brilliant place than a football club to find victims,' he said. Murphy explained that young professionals often turned to older teammates and managers for advice on how to manage their money and were then introduced to financial advisers who quickly sought to gain their trust.
The 48-year-old said that what occurred was grooming. Murphy, who said there was no intention to avoid tax, talked about how people would insert themselves in players' lives before getting them to agree to investments later down the line.
'Our option [for investment] was these people,' he said. 'It's not footballers, it's young men being manipulated. People can't understand why you got into this position. It makes you feel silly – it adds to the shame. People have been through hell and back. Some are still there.'
Murphy talked about former players experiencing depression, anxiety, financial ruin and family breakups. He claimed that HMRC does not have the desire or competence to target the perpetrators of investment fraud.
Deane said he found himself in a similar position to Murphy after retiring. He said some people had been pushed to the brink of suicide. 'I watched it break friends' marriages,' Deane said. 'It affects your health and wellbeing.'
Alex Sobel, the Labour MP for Leeds Central and Headingley, echoed Murphy by describing it as 'financial grooming'. He said players lost money to fraudsters and criticised HMRC for going after victims of crime. The meeting was also attended by Caroline Nokes, the deputy speaker, and Lady Newlove, the victims' commissioner.
John Mann questioned why HMRC pursued what he described as 'notional income' due to the players had the investments succeeded. 'It isn't real money,' Lord Mann said. 'It's potential money. This is what they're hounding people over. I allege HMRC cannot hire people with the skills to address complex fraud.'
A spokesperson for HRMC said: 'We sympathise with people who may have lost money by entering such arrangements and handle these on a case-by-case basis, taking the wellbeing of all taxpayers seriously. Anyone who is worried about a tax liability should contact us as soon as possible to talk about options.'
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