Carl Frampton ‘did not gain single cent in tax’ from US title bouts

The former world champion’s accountant also told of his shock at discovering a company in which the fighter was a director had allegedly racked up losses of £500,000.

Tax arrangements for shows staged in the United States came under scrutiny on day seven of Mr Frampton’s legal battle with ex-manager Barry McGuigan.

The 33-year-old Belfast boxer is seeking £6 million in alleged withheld earnings during their eight-year partnership.

His action involves claims against Cyclone Promotions UK Ltd - of which Mr McGuigan was a director - over purse fees, broadcasting rights, ticket sales and merchandising.

A counter lawsuit has been filed against Mr Frampton, accusing him of breach of contact when he split from the company in 2017.

The two sports starts deny the respective allegations against him.

Earlier in the hearing it was claimed that Mr Frampton saved hundreds of thousands of dollars by under-declaring purses from contests in America.

They included two fights against the Mexican Leo Santa Cruz: in New York in July 2016, and the rematch in Las Vegas the following February.

In court today accountant Sean McCrory, who Mr Frampton enlisted in 2016, was questioned about arrangements on withholding tax - a charge on income received by non-residents.

He told counsel for Mr McGuigan, Liam McCollum QC, that the boxer still had to pay higher rate income tax in the United Kingdom.

“He hasn’t gained a single cent in tax savings in the USA,” Mr McCrory insisted.

“He’s taxed at source in the USA, but in the UK he’s liable to tax on his worldwide income.”

During exchanges Mr McCollum and the accountant disputed whether the withholding tax had been added on to a figure of just over 1.1m US dollars.

It was claimed that up to 336,000 dollars more should have been declared as income.

But Mr McCrory repeated firmly: “That is nonsense.”

Mr Frampton’s action centres on an alleged conflict of interest between Mr McGuigan’s twin role as manager and promoter.

He further claims that he was persuaded to sign as a director of another Northern Ireland-based Cyclone company on the promise of a 30% profit share which was never received.

According to Mr Frampton’s case the final straw in his deteriorating relationship with Mr McGuigan came when the taxman called at his home in the summer of 2017 with a bill for nearly £400,000.

Mr McCrory told the court how he studied the Northern Ireland Cyclone company’s previous accounts after becoming involved with the boxer.

“The accumulative losses as of June 2015 were £300,000,” he said.

He was asked if he had brought the issue to the attention of anyone at Cyclone during correspondence.

“I deliberately didn’t raise that, I wanted to attend a meeting,” he answered.

“I kept it up my sleeve.”

Mr McCollum put it to him that the alleged losses were not flagged up by Mr Frampton until May 2017.

The accountant responded that there were two big world title fights against Scott Quigg and Santa Cruz in the intervening period.

“I would have expected the financial situation at that stage to have improved,” he said.

“They were two massive fights... those are the fights you make your money out of.”

Pressed by counsel to explain any delay in highlighting the company’s alleged money troubles, he mainted: “I strongly suspected the financial situation since June 2015 had strongly improved.”

Mr McCrory explained that by the time accounts were filed in June 2016 the Quigg contest had been staged at the Manchester Arena.

“I was shocked that a £300,000 loss was now sitting at a £500,000 loss,” he said.

The hearing continues.