The government is claiming that Spurs manager Harry Redknapp and former Portsmouth boss Milan Mandaric used offshore accounts to avoid having to pay income tax on more than £189,000 that he received from the sale of two players.
John Black QC opened the Crown’s case at Southwark Crown Court by telling jurors “both parties must have known” they were avoiding taxes.
“These payments were a bung or offshore bonus that the parties had absolutely no intention of paying taxes for,” Black said.
The first charge alleges that between April 1, 2002 and November 28, 2007 Mandaric paid £93,100 into a bank account held by Redknapp in Monaco. The second charge for the same offence relates to a sum of £96,300 allegedly paid by Mandaric to the same account between May 1, 2004 and November 28, 2007.
At Portsmouth Redknapp was initially Director of Football so he received 10% of the net profit made on player transfers made during his time as part of a clause in his contract, Mr Black said.
“He had a highly lucrative employment contract,” he said.
His contract was later changed to that of manager and the bonus was reduced to 5%, the barrister said and he was paid about £100,000 when England striker Crouch left the south-coast club for Aston Villa in 2002, the court heard.
Redknapp never mentioned the Monaco account as he was investigated by HM Revenue and Customs officials over his transfer dealings at West Ham, the court heard.
The probe, between January 2004 and October 2006, “was originally prompted by concerns over a £300,000 payment… regarding profit made in a player transfer, namely Rio Ferdinand”, Mr Black said.
The Monaco bank account eventually came to light during an inquiry into illicit payments in football, led by Lord Stevens, the former Metropolitan Police Commissioner.
Day one was the prosecution laying out its case against Redknapp and Mandaric. It will be interesting to hear Redknapp’s defense about the ‘bungs” and his Monaco account. If he is found guilty, that will be the end of Redknapp’s dream of taking the England job at the end of the summer, and it is unknown whether Spurs would retain him as manager if he is found guilty.
So a lot is riding on the outcome of this court case for Redknapp.