Tax dodging football agent Jerome Anderson has been ordered to cough up £1.2 million to the Inland Revenue over a football academy he helped set up.
The controversial figure, who has represented Denis Bergkamp and Thierry Henry, invested almost £3 million in the Cape Town based venture.
But the Bafana Soccer Academy which recruited some of the best young African footballers went into administration in 2011 – and he didn’t make a penny.
Anderson attempted to use this as an ‘artificial trading loss’ to reduce his tax bill by huge amounts of money.
But the Upper Tribunal of the Tax and Chancery Chamber, sitting at the Royal Courts of Justice, found his activities were more like those of an investor than a trader.
Arsenal fan Anderson, whose stable of stars also included Ian Wright and Charlie Nicholas, had meetings with the academy’s manager Mike Steptoe and spent time watching DVDs, picking three players in which he was to have a financial interest.
He also met with other football contacts in London and Italy to talk about the Bafana opportunity.
The court threw out his appeal against an earlier decision that he was not entitled to the losses he had claimed under the Income Tax Act 2007 – ruling this did not constitute a ‘trade’.
It was the first case under a law introduced to close a loophole known as ‘sideways loss relief’ – setting certain losses against general income or chargeable gains.
His activities were more akin to those of an investor in a market comprising young African footballers, but with no substantial active day to day involvement, said the judges.
They were more like “an investor picking stocks to invest in, rather than a trader who is creating value in those stocks by adding value to a company on a day to day basis.”
Mr Justice Morgan and Judge Roger Berner said: “This decision means he could not claim a trading loss and tax was due.”
Penny Ciniewicz, HMRC’s director general for customer compliance, said: “The court has made it clear that these schemes don’t work.
“Our public services rely on everyone paying their taxes and it is unfair for people not
to pay their share.
“Anyone who is caught up in tax avoidance and who wants to put it behind them
should come forward now and settle what they owe.”
She added that this latest victory continues HMRC’s excellent record of winning nine out of ten tax avoidance cases taken to court, with many more settling what they owe before reaching that stage.
Anderson has cut a controversial figure throughout his career.
Four years ago he was sued by another football agent over the transfer of former England player Gavin McCann from Aston Villa to Bolton Wanderers.
Although he threw out the claim, the judge described Anderson as “a very unreliable witness.”
He said some of the evidence given by him and his then colleague Jeff Weston was “wholly implausible”.
Anderson, who ran SEM (Sport Entertainment and Media Group), was a football agent for 30 years.
He was the first to introduce foreign stars to the Premier League.
He was also involved in the controversial takeover of former Premier League champions Blackburn Rovers by Indian chicken farmers Venky’s.
The club has since struggled but last season fought its way back from the third tier of of English football to the second.
After his friend Sam Allardyce was dismissed then Manchester United manager Sir Alex Ferguson said: “You’ve got that issue at Blackburn of an agent involved and deciding the future of the club, Jerome Anderson, he couldn’t pick his nose.
“It’s baffling and it’s a serious threat to how clubs get run and how they conduct themselves.”
Anderson denied he had anything to do with the picking or recruitment of players.
He also extended his reach into heavyweight boxing, representing Lennox Lewis when he famously knocked out ‘Iron’ Mike Tyson.
He has now left football to pursue other business interests.