High profile sportsmen among those accused of exploiting tax relief scheme
Premiership football stars and managers have been accused of exploiting a scheme taking advantage of tax reliefs for building projects in enterprise zones.
The total cost of construction was £264 million for two data centres on the Cobalt business estate near Newcastle. They were among 674 investors who paid a combined £79 million towards the project, with the rest of the £185 million cost borrowed from the Bank Winter of Vienna.
Under the enterprise zone reliefs as they were at the time, though they only paid part of the cost, the investors were entitled to 50% tax relief on the full £264 million purchase price, meaning they made a £52 million profit under the deal. The deal was structured in April 2011, just before tax reliefs on enterprise zones were replaced with different allowances.
To date, no tenants have signed up to the two centres, causing many to view the operation as purely one of tax avoidance.
Margaret Hodge, chair of the Commons public accounts committee said ‘It is deeply depressing to find greedy individuals exploiting a perfectly proper government objective, to line their pockets. Enterprise zones aimed to create jobs, not to enable rich people to get more money back than they invested,’ she told the paper.
Those who invested in the scheme included Wayne Rooney and England manager Roy Hodgson, Arsenal manager Arsène Wenger and midfielder Mikel Arteta and Everton players Marouane Fellaini, Nikica Jelavic and Sylvain Distin.
Comedian Jimmy Carr was also an investor.