Capello under investigation for tax evasion in Italy

Fabio Capello, the urbane Italian with a prized modern art collection who has the unenviable task of trying to transform the fortunes of the England football team, suffered his first brush with the negative headlines that dogged his predecessors yesterday after it emerged he is being investigated for tax evasion in Italy.

The financial affairs of the England manager, who has been in his £6m-a-year role for less than a fortnight, are being scrutinised by an examining magistrate in Turin to determine whether he has paid the tax due on his earnings from sponsorship deals. Investigators are also looking at a number of offshore accounts to ensure they were not used to evade tax payments in Italy.

Capello's representatives, including his son, Pierfilippo, a lawyer for a Milan-based firm that specialises in the setting up of accounts in tax havens and minimising tax liabilities, insisted that the inquiry was a routine audit which is regularly carried out on wealthy individuals in Italy, including leading figures in football.

The Football Association moved quickly to calm concerns about the fate of its star employee. A spokes-man said: "We have spoken to Fabio and his advisers about today's newspaper reports in Italy and they have explained the facts. They have also given us assurances that Fabio Capello's tax payments are in order. It is our understanding that the Italian tax authorities are currently following a procedure of looking into the finances of a number of high-profile individuals."

But news that the new national coach, who faces the first test of his motivational and tactical expertise when England play Switzerland in a friendly at Wembley on 6 February, is under formal investigation will cause concern.

It is understood that the inquiry, which has been conducted in secret for several months, is focused on Capello's time as manager of Juventus between 2004 and 2006 and is part of a wider investigation into a bribes scandal that has rocked Italian football. Juventus, who are based in Turin, were demoted to the Italian second division two years ago as punishment for the calciopoli affair.

Capello, who along with being one of the most successful coaches in European football is also considered one of its most cerebral figures, was untainted by that scandal. His son went out of his way yesterday to insist that the peculiarities of the Italian justice system had made the tax investigation, first reported by the Milan-based newspaper Il Giornale, seem more sensational than it is. Under Italian law, any tax inquiry involving earnings above €200,000 (£150,000) is automatically referred to the judicial authorities.

Pierfilippo, who said his father was not concerned at the inquiry, said: "This kind of investigation is going on with a number of famous people in Italy with big cash flows. They want to understand how he was paid at Juventus. We're very confident about it and comfortable everything is clear."

It was reported that the Turin public prosecutor, Raffaele Guarinello, was looking at two offshore companies set up by Pierfilippo and his brother, Edoardo. The Capello Family Trust, which is registered in Guernsey, received sponsorship payments for Fabio while another company, Sport 3000, owns properties in Spain and Italy.