Beckingham Palace?

Is David Beckham to Finally Receive Knighthood?

Yes, it appears that Golden Balls is set to receive a knighthood in King Charles’ upcoming Birthday Honours list. A long-awaited accolade for the former England captain who was awarded an OBE back in 2003.

This honour will even make his wife Victoria “Lady Beckham,” a titbit sure to please tabloid writers.

Yet behind the celebratory headlines lies a curious question. What took so long?

Indeed, Beckham’s path to “Sir David” has not been smooth.

For years, rumours swirled that his exclusion from the honours lists was no accident, but the result of past tax avoidance allegations that raised red flags with the powers-that-be.

From leaked emails revealing Beckham’s frustration at being passed over, to policy debates about whether “poor tax behaviour” is consistent with British honours, Beckham’s journey highlights how one’s tax affairs can intersect with the UK honours system in unpredictable ways.

 

A ‘red flag’ 

The story begins with Beckham’s involvement in a controversial tax avoidance scheme in the 2000s.

Like many celebrities and sports stars of that era, he invested in a film financing partnership, specifically the Ingenious Media film partnerships, that promised large tax write-offs by exploiting film industry tax reliefs.

These schemes claimed that investors could claim big losses on paper and offset them against other income.

HMRC eventually cracked down, arguing such partnerships were not genuine trading vehicles but simply rather circular tax avoidance set-pieces.

In June 2017, Beckham was among more than 1,000 people who lost a court battle against a £700 million HMRC tax bill tied to the Ingenious schemes.

For Beckham, however, the fallout was not just financial.

Unbeknownst to the public at the time, HMRC had alerted the Cabinet Office honours committee about Beckham’s participation in the scheme, reportedly tagging his name with a “red flag” in 2014 to warn that his tax affairs failed the smell test.

Under a confidential vetting arrangement, HMRC rates honours nominees using a traffic-light system – and Beckham was given a red.

A government memo later spelled out the principle that “poor tax behaviour is not consistent with the award of an honour”.

In other words, you don’t get to be called Sir if you’re seen not paying your fair share.

So despite Beckham’s fame and contributions to sport and charity, his knighthood nomination was blocked at that time due to the tax avoidance taint.

It’s worth noting that Beckham has always maintained he had no deliberate wrongdoing in the film scheme. Sources close to him claimed he had no knowledge that the investment was aggressive tax avoidance.

Indeed, in a twist, the Ingenious partnerships later won a partial victory on appeal in 2021, slightly vindicating some investors.

But by then the damage to his honour chances was already done – effectively already two nil down at half time.

For much of the 2010s, Beckham’s name stayed off the honours lists.

The poster boy had become, well, a poster boy for how tax controversies cast a long shadow over nominations.

Leaked emails

If Beckham was quietly frustrated, the public got to read all about it when leaked emails surfaced in 2017.

Hackers (dubbed “Football Leaks”) obtained emails between Beckham and his PR advisor in which the footballer fumed at being passed over for a knighthood.

The private messages, which Beckham’s team said were obtained illicitly and in some cases doctored, revealed just how upset he was.

In one expletive-laden rant, Beckham appeared to call the honours committee “unappreciative [c-units]” for snubbing him.

He griped that he “swears blindly I should have got something” after all his charity work (a reference to his long-time UNICEF ambassadorship).

He also cited the “red flag” from HMRC as the reason he was being denied the title.

The leaked correspondence was splashed across European media, embarrassing Beckham and forcing his representatives to play damage control.

His spokespeople did not deny his colourful language (aside from claiming some swear words were inserted by hackers), but explained that these were heat-of-the-moment expressions of frustration among close confidants.

British officialdom, of course, held a Postecoglou-esque high line.

Tax avoidance should have consequences. In decades past, a star of Beckham’s stature might have been knighted promptly at career peak.

However, post-financial-crisis, with public anger toward ‘tax dodging’, even David Beckham had to wait until his tax affairs were beyond reproach (or at least out of the headlines).

HMRC x Honours Committee

Beckham’s saga shines a spotlight on how tax behaviour is factored into the honours system.

Behind the scenes, HMRC plays the unlikely role of kingmaker (or knight-maker), screening nominees for any tax skeletons in the closet.

A formal Memorandum of Understanding exists between HMRC and the Cabinet Office Honours Secretariat, allowing tax data to be shared for vetting purposes.

Prospective honorees are essentially given a risk rating:

• green for all clear;
• amber for potential issues; and
• red for big no-no’s.

The aim is to “minimise the risk that prospective candidates have behaved in ways likely to bring the [honours] system into disrepute”.

This policy only became public around 2018, but it had been in quiet effect earlier.

When the rule was revealed, a Cabinet Office source summed it up bluntly. If someone’s been involved in “controversial tax planning schemes”, they shouldn’t be rewarded with a knighthood.

The thinking is clear. How would it look if the Crown knights a person one week, and the next week they’re unmasked as a tax dodger in the press?

Beckham was a high-profile casualty of this vetting. And he wasn’t alone.

Around the same time, Formula 1 superstar Lewis Hamilton found himself under similar scrutiny.

By late 2020 Hamilton had become the most successful F1 driver ever, and public calls for his knighthood grew loud.

Yet whispers in Whitehall suggested that “according to The Times, his tax affairs will come in for intense scrutiny before [he] get[s] the green light for a gong”.

Hamilton, a Briton, was (and still is) a resident of Monaco  and had appeared in the 2017 Paradise Papers leaks, which alleged he avoided £3.3 million VAT on a private jet via an offshore scheme.

Though Hamilton was later cleared of wrongdoing in that arrangement, the mere whiff of it meant honours committees proceeded with caution. As one commentator noted, in an impressive pun-fest, that the road from podium to knighthood for Hamilton was “anything but slick” due to these tax questions.

Ultimately, Hamilton did get his knighthood in the 2021 New Year Honours, proving that an impeccable competitive record plus some proactive tax clarification can win out.

But not before media debates about whether his “financial affairs should overtake his track success” in determining his honour.

The Hamilton case showed the vetting process in action and perhaps suggested that exceptional achievement might tip the balance toward forgiveness.

If you’re a seven-time world champion, the honours committee may find a way to justify a ‘green for go’… Monaco address notwithstanding.

Arise and exile

The cautious stance of recent years contrasts with how some earlier honourees were treated.

Critics point out that the honours system can appear inconsistent, even hypocritical.

For example, Sir Philip Green, the retail tycoon behind Topshop, was knighted in 2006 despite his wife, the legal owner of their business empire, relocating to Monaco and undoubtedly this saving the couple many 00000’s of tax.

Likewise, Sir James Dyson received his knighthood in 2007 and later a peerage even though he controversially shifted his residency and company HQ to Singapore years afterward.

Notably, Dyson still appeared among Britain’s biggest individual taxpayers in recent times, proving one can be a tax exile yet still pay large sums to HMRC via business interests.

But the optics of Britain’s richest engineer moving operations offshore after his honour left a sour taste for some observers.

Perhaps the most cited example is Sir Jim Ratcliffe, the chemicals billionaire.

Knighted in 2018 as Britain’s richest man, Ratcliffe promptly moved to Monaco in 2020.

It has been suggested that the move could save him an estimated £4 billion in taxes.

The honours committee was reportedly “furious” at this outcome and even considered a new rule (cheekily dubbed the “Ratcliffe clause”) requiring nominees to declare if they intended to change tax residence soon after honours.

But at the time of his knighthood, there was no mechanism to pre-judge future behaviour. Ratcliffe hadn’t broken any laws. He simply took his title and then took his fortune to sunnier climes.

Of course, to continue the football theme, Ratcliffe later bought a stake in Manchester United and soon found that £4 billion was not very much money at all…

“Beckham Law” – A tax legacy worth a Sir… or Senor?

While Beckham’s tax record once delayed his honour, he also has a tax-related legacy that might deserve an honour on its own – at least in jest.

I’m talking about the famous “Beckham Law” in Spain.

When Beckham joined Real Madrid in 2003, Spain created a special expatriate tax regime (officially, Ley de Impatriados under Royal Decree 687/2005) so that superstar foreign players could come to La Liga and enjoy a flat income tax rate and exemption on overseas earnings.

This law, nicknamed after Beckham, broadly allowed highly-paid imports to pay tax as non-residents, meaning Beckham himself saved Spanish tax on his worldwide image rights income while playing in Madrid.

The goal was to lure galácticos by letting them keep more of their money. Spain was essentially saying “please come boost our league, and by the way we’ll tax you at only 24% and ignore your endorsement income abroad”.

The Beckham Law was a hit, for the galacticos at least, until public backlash led Spain to curtail the benefit in 2015. This ironically excluded footballers from the very rule named (at least, colloquially) after one.

Arise Sir Golden-balls

Now, after years of intrigue, David Beckham is finally set to get his moment at Buckingham Palace… or, to channel my best Sun headline writer, Beckingham Palace.

The timing suggests that whatever concerns once nixed his nomination have been resolved or forgiven.

Beckham turned 50 this year, a milestone that perhaps makes his honour feel like a career capstone rather than a premature reward.

In the interim, he has burnished his reputation, expanding his charitable work, fronting England’s 2012 Olympic bid, even queueing for 13 hours to pay respects to the late Queen, a very public display of patriotism that won hearts.

The image of Beckham has shifted from mere football superstar to elder statesman of English sport and celebrity diplomacy.

Crucially, HMRC appears satisfied at last.

Any tax avoidance clouds have long passed. Indeed, in recent years Beckham and his wife have reportedly been among the UK’s top taxpayers, with one tabloid applauding the £12.7 million they paid in a single year.

Such headlines, it appears, might mark the completion of his redemptive arc.

Fergie-time

So, has the honours system become more forgiving or simply more confusing?

The evidence is mixed.

On paper, the standards are stricter. Overt tax avoidance is a fast-track to the rejects pile.

But in practice, time and context matter. A bit of “good behaviour” (paying all dues, staying out of tax schemes) for a number of years can rehabilitate an image.

It also appears that exceptional service or public pressure can tip the scales.

One could argue the system’s integrity is intact. Beckham had to wait and prove himself, which, at long last, he eventually appears to have done.

Arise Sir Golden-balls.

Now… where’s Kevin Sinfield’s knighthood your majesty?