As reported on the Telegraph website (see below) Newcastle United have settled their financial dispute over image rights with the Taxman.
Newcastle United settles image rights tax dispute with HMRC
Newcastle United has become the latest Premiership club to settle its tax dispute with HM Revenue & Customs over the payment of image rights to players.
Newcastle Utd is not expected to reveal how much it paid to settle the dispute, however it is understood to be less than the contingent liability the club put aside in previous years’ accounts.
The settlement covers all outstanding disputes with HMRC, an insider said. The bulk of the matter is understood to relate to the payment of image rights to its footballers. By labelling payments image rights rather than salaries they can be paid to companies, often offshore, and attract corporation tax at 26pc rather than higher rate income tax at 50pc.
Although only Chelsea and Newcastle have released information on settlements with HMRC, most Premiership clubs are understood to have come to agreements covering past liabilities and future treatment of payments.
An HMRC spokesman said: “The majority of premier league football clubs have now confirmed that they will pay tax arising from image rights payments, and we continue to negotiate with those that are yet to settle.”
Details of the tax dispute were contained in the accounts for Mr Ashely’s MASH Holdings vehicle. The accounts also detailed how Mr Ashley has taken a £5.8m charge against the value of shares in Blacks Leisure after it went into administration earlier this year. The charge will be made in the current year’s accounts.
For the year ending April 30, 2011, Mr Ashley’s holding company made a profit of £79.4m. Turnover was up 10pc at £1.68bn. The company did not pay a dividend.