London (AFP) - Gareth Southgate is among hundreds of rich clients caught up in a multi-million-pound tax avoidance dispute with British authorities, a newspaper reported on Friday, on the eve of his first match in charge of England.
The England interim manager invested in two partnerships set up by a film investment fund, Ingenious, which is accused by Her Majesty's Revenue and Customs (HMRC) of being part of an elaborate scheme to avoid paying tax, the Daily Mirror said.
A source close to the former England player told AFP he made the investments in 2004 in good faith and would not challenge any tax demand that might arise when the case was resolved.
But the timing is embarrassing for the 46-year-old and for the Football Association, the English game's governing body, as they hope to draw a line under former manager Sam Allardyce's controversial exit.
Southgate takes charge of England for the first time in Saturday's World Cup qualifier against Malta, barely a fortnight after his predecessor quit in disgrace after just 67 days and one game at the helm.
Allardyce, 61, was secretly filmed by undercover reporters giving advice on how to circumnavigate transfer rules and mocking England predecessor Roy Hodgson.
Appointed England manager on a £3 million-a-year contract (S$5.12 million), Allardyce also agreed to travel to Singapore and Hong Kong as an ambassador for their fictitious firm for a fee of £400,000.
According to the Daily Mirror, Southgate is one of about 400 rich clients of Ingenious, a movie financing firm that has backed films such as Avatar but which is accused of creating artificial losses to help investors avoid tax. Following a tribunal ruling earlier this year, investors are facing a bill for £434 million in unpaid tax, plus interest and legal fees, according to the Mirror.
Ingenious denies it operated as a tax avoidance scheme.
A spokesman for the FA told AFP: "This is a private matter."
Meanwhile, The Times newspaper reported that England captain Wayne Rooney is facing a £3.5 million tax bill after a separate film investment partnership in which he put his money was also accused of tax avoidance.
"Wayne's tax affairs have always been conducted in full compliance with the law," a spokesman told the newspaper.