The 90 day a year loophole that Ken Bates exploits may soon come to an end after a courtcase against Robert Gaines-Cooper (another UK tax exile) ruled he should pay UK tax as his main interests lie in this country, despite a move to the tax haven of the Seychelles.

Always ready for a fight

The landmark court case could have a knock-on effect for many football chairman, not least, our very own cuddly Ken, who has been dodging tax for some years now with his millionaire lifestyle in Monaco. The loophole both he and Gaines-Cooper exploit allows them to spend 90 days in the UK tax-free running whatever businesses they like, whilst claiming citizenship in tax-free havens abroad.

Gaines-Cooper’s case will probably be appealed in the Supreme Court, but Ken Bates will be watching from afar, eagerly awaiting the outcome, which will likely bring a whole host of cases against millionaire tax-exiles living abroad from all walks of life, not just football.

Although each case will have to be ruled on an individual level, it’s likely each decision will come from where the majority of each defendants income comes from. In the case of Gaines-Cooper, the majority of his personal income comes from within the UK, so the court therefore decided he should be made to pay tax to the sum of £30,000,000 on this.

Ken Bates is likely to face a similar problem as Leeds United (to my knowledge) is his only remaining business interest so it would be impossible to argue his income comes from anywhere other than the United Kingdom.

So, what does this mean for Leeds United? Probably very little as it would be personal to Ken Bates’ own tax-bill. Whether he would increase the salary he takes from the club to continue funding his current lifestyle and to pay the back dated bill is probably our only concern. For Ken Bates however, it could be mean a massive tax bill, followed by 40% of earnings (soon to be 50%) thereafter.

I wouldn’t expect anything to happen too soon mind, as the legal world and HM Revenue & Customs will be waiting for the result of any Gaines-Cooper appeal whose landmark case will likely set a precedent for future ones. If the ruling does stand in the Supreme Court, HM Revenue & Customs will likely start action against people like Ken Bates, but are bound to face strong opposition from the million and billionaires teams of lawyers.

Happy for Bates to stay on under new majority owner?

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  • Paul C

    I think he should pay tax . I fully support HMRC for tackling this. Remember though as far as Bates is concerned he has told a court he takes no income from the club and he has invested nothing into the club. So as far as I know he only has a state pension to live on anyway. I suspect even if he does have a tax bill he would just arrange for the supporters..sorry the club to pay for it along with the libel legal bills. No problem !

    Ken Bates and his like are legitimate targets but I do believe that HMRC should also be looking at secretive owners based offshore in Tax havens , especially those controlling UK based companies. For all they know these ‘owners’ could be organised crime bosses, terrorists or even investment bankers and they all need to be hunted down and dealt with.

  • derbyshirewhite

    Interesting but unlikely to happen as Ken doesn’t maintain a family residence in the UK which was one of the deciding factors in the Gaines-Cooper case. The lack of transparency in the clubs financial affairs is a scandal though and perhaps when Portsmouth sink below the waterline we can only hope the FA/ Football League find the bottle to address the issue.

  • timm

    Don’t see how this affects our club really? I don’t really give a toss about Bates as long as Leeds are in good shape financially, & that seems to be the case. Brown needs to be careful, if some of the people he’s chasing for this tax decide to move their business elsewhere he’ll get bugger all from the tax exile & he’ll get bugger all tax from all the employees either because they won’t have a job! He’s just desperate because he’s bankrupted our country by giving benefits to Eastern Europeans who have no intention of getting a job & by giving billions to countrys who don’t give a shit about us & by spending billions on sending our young lads to their deaths in a war that very few people agree with! Rant over!

    • Dje

      Lol – if only East Europeans had been running our banks for the last ten years…

      There is a connection between the health of Bates’s (personal?) finances and that of Leeds United. If he did get clobbered by the taxman (which in this case, I doubt) you can read it one of two ways.

      One, he’d be as keen and desperate to jump ship at Elland Road as he possibly could. Hear the cheers of the LLHB brigade!

      Two, he’d stick about (cos he’s got nowt else to do) and charge us even more for the pleasure of having him as our chairman. Hear the silence!

      Personally I’d still rather be with Leeds & Bates’s predicament than be a Portsmouth and looking into the abyss.

  • paull

    I totally agree with the taxman on this one I don’t see why the mega-rich should be allowed to live tax free just because they can afford clever accountants and manipulative lawyers while the rest of us subsidise their lifestyle. I can’t see this effecting Master Bates however he’s already completely contradicted himself in court over his ownership, non-ownership of the club and will doubtlessly continue to do so. Come on you whites, MOT.

    • Dje

      I wonder if his lawyers & accountants can argue that Bates lost (in theory) c.£10-15m with Leeds when we went through that dodgy administration stitch-up with KPMG when we got relegated from the Championship, and offset this with whatever ‘profit’ the taxman might see him gleaming from Leeds in the last 2-3 years?

  • Neil

    Bates doesn’t take a penny in “salary” out of the club so I wouldn’t be so quick to put out the bunting. He never did at Chelseas either. Given the smoke and mirrors surrounding FSF etc I doubt HMRC would be able to pin anything on him before he departed to see the man downstairs.

  • TheReaper08

    This is a non story and really only serves to stoke the fires of the Bates haters.

    As Neil states above Bates has never ever declared any income from any football clubs, this is either through slight of hand or because it’s true. Either way it means nothing and really is only of interest to the Clarkeonenil or LLHB sites. They don’t need a second invitation to tell us all that Bates is the devil and will happily eat your children given half the chance.

    As for all of you HMRC ambassadors ask yourself this, if you had worked hard to make your own fortune paying taxes all along the way, employing plenty of people that also pay tax along with your companies paying UK business taxes would you in retirement or later life be happy to give up 40% or more of your taxable earnings ? Well done if you martyred yourself to the UK tax cause by saying yes but personally I would be off in a flash.

    • timm

      Spot on Reaper!

  • Colin

    Neil & Reaper are right. Ken’s not financially linked to the club so he officially doesn’t have a vested interest in a UK company. I guess Ken’s role is that of a consultant, a non profit role. FSF own the finances behind the club – they’re based outside the UK and appear to have no hands on involvement in Leeds as they allow Ken the consultant to do this through the goodness of his own heart and for no money whatsoever.

    Whether you believe that or not is something else, but that’s the official story and there’s no way that HMRC are getting any of Ken’s (or FSF for that matter) money. I’m pretty sure the reason for the complex ownership of Leeds in the first place was avoidance of responsibility for things such as tax.

    As Ken well knows, tax doesn’t have to be taxing : )

    • TheReaper08

      As Ken well knows, tax doesn’t have to be taxing : )

      Quality…….

  • Mikelufc

    If money is earned in the UK then UK tax should be paid.
    I would love to be paying 40 million a year in tax.
    60 million for me thanks!
    Simple isn’t it.
    The trouble is the richer some people get the greedier they get.
    Dopes Bill Gates fuck of and live in a tax haven?
    He wouldn’t care for the company of most of the residents.
    The only thing tax exiles have in common is Greed.

    I have an old friend who lived all his life in Leeds and made millions.
    He sold the company and moved to Jersey, the ONLY time he is happy is during the 90 day period when he can play golf and drink with all his lifelong friends.
    The rest of his life is miserable.

    • TheReaper08

      And yet he chooses to see out his miserable existence in his tax heaven, only enjoying life for 90 days a year.

      He obviously still enjoys his miserable life slightly more than paying UK taxes then otherwise he would be back in quick time.

      You didn’t give that comment much thought did you Mikelufc.

      • timm

        Spot on again Reaper!!

    • Colin

      Pay your 40% tax on whatever you earn. Then pay your car tax, then fuel at 50% tax, then buy a packet of cigs at 70% tax, then pay 17.5% on everything you buy. Pay your bills – council tax, water rates, gas electric plus tax on that too. Then chill out listen to some CD’s or watch a DVD which are overpriced compared to the rest of the world. Or watch TV as long as you’ve paid your TV license. Or buy a pint at 30% tax and relax safe in the knowledge that you’re paying your national insurance for a state pension that will never come to anything. And then go home to your overpriced house that you’ve had to pay stamp duty (tax) on and then die and pay inheritance tax on any money you’ve managed to save that you have the cheek to leave to your family.

      Or live in a tax haven and have a better way of life and more money in your pocket. It’s a no brainer for me.

      The only reason tax havens exist is because there are so many places like the UK that are so ridiculously taxed.

      Do I like Ken Bates. No. But do I have a problem with him living in a tax haven. Not one bit.

      • timm

        Mikelufc, If you went into a chippy & got 20 lots of Fish & Chips & the owner said you could have yours for free because you’ve given him a big order would you say no & insist on paying for them? If a wealthy bloke invests in this country & creates jobs for hundreds or even thousands of people, all of whom paye tax & NI & spend their wages in our shops then that wealthy bloke should be given a big pat on the back & not penalised. Seems to me the only greedy ones here are our lovely government. They always want a bit more.

  • Mikelufc

    And yet he chooses to see out his miserable existence in his tax heaven, only enjoying life for 90 days a year.
    He obviously still enjoys his miserable life slightly more than paying UK taxes then otherwise he would be back in quick time.
    You didn’t give that comment much thought did you Mikelufc.

    No, I didn’t give it a lot of thought, I just said it the way it is.

    He has set out his stall in Jersy and the cost of reversing his situation is more than he wants to pay.
    You know the story about the rich man and the camel! The same with life.
    I have known a lot of rich people in my time and found very few who were happy.
    There is only so much you can eat drink and shit.
    Money gives you opportunities denied them who have little but once your basic needs are satisfied not much more satisfies like you think it might.
    “Wherever you go, there you are.”
    People, Family and Friends count.

    • timm

      Blimey! Sounds like you’re veering towards religion now mate! I think i’ll give that one a wide berth! Jesus saves but Snodgrass score’s from the rebound!!

    • Craig

      I share your belief that money certainly doesn’t make those who hoard it happy but it can free us up to give something back to society. What I’m not sure about is whether or not Kuddly lives a miserable life or not – and neither can you. Frankly I’m not sure I care – he made his bed…

      People who don’t give much thought to constructing an argument ought to pause before insisting they know ‘the way it is’.

    • The Reaper

      People family and friends do count but how do you propose to pay for the things you do with or for these people ?

      Real genuine friends will stay with you whether your a prince or a pauper.

      And despite your friends only happiness being in the UK for 90 days the COST to reverse his decision is too high, are you seeing a pattern in your friends actions yet ?

      Some of us are just sick of paying through the nose for a low quality standard of life where we get no value for our tax £, as a result when I have made sufficient money I will be off.

  • Mikelufc

    So you have a problem with a historical figure Timm?

    Well there you go.
    But not as big a one as I have with your chippy analogy.

    • timm

      No problem at all mate. Sorry to hear you have a problem with my chip shop analogy! Maybe i should’ve said loaves & fishes?

      • Colin

        To be fair though, West Yorkshire fish and chips are lovely. I live down south and they’re rubbish – they have the skin on!!

        When I come up to Yorkshire I love getting my fish and chips!!