A report has warned that footballers in Britain are using sophisticated scams to dodge taxes and that the game in general is increasingly vulnerable to criminal activity including money-laundering and illegal gambling.

The Financial Action Task Force (FATF), a Paris-based international agency that develops policies and recommendations to protect the financial system, cautioned that criminals are investing "dirty money" in clubs and players in countries such as Italy, Belgium and Argentina and gave two examples of tax evasion at unnamed British clubs.

The report said that a player and his club had been complicit in hiding a signing-on fee: "A disclosure was made by a player, revealing that his signing-on fee was disguised as part of a fee to a foreign agent. He confirmed that the agent then paid him £300,000 abroad and did not previously disclose this to the UK tax authorities. It is likely that the club concerned was fully aware that the payment to the agent included a signing-on fee for the player and the benefit to the club in such an arrangement is that it avoided social security contributions of £38,000."

The second case detailed in the report concerned a club that increased image rights to a player even after it became clear they had no commercial value: "A player (non-UK national) entered into an image rights agreement with a club. The player had transferred the rights to exploit his image exclusively on a world-wide basis to a company registered in a known tax haven in return for shares of that company. Unlike all the other players at the club, he was the only individual not to have either a signing-on fee or a loyalty bonus and appearance fees.

"The club had not exploited the player's image in any way and after two years had sought professional advice, only to be advised that the image had no commercially exploitable value. Nonetheless, the club renegotiated both the playing and image rights contracts after three years, increasing the level of payments in both. The club concerned conceded that the image-rights agreement was part of the employment terms and paid over additional duties of £938,688. Additional duties of £404,480 were also to be paid over the future life of the image-rights contract."

The report also warns about illegal gambling, the trafficking of young players and match-fixing as the growing amount of money in football leads to the likelihood of more corruption. Possible match-fixing by Asian betting syndicates has been named as an area of concern by Uefa, European football's governing body. Despite persistent rumours of match-fixing and other corruption in football for decades, little hard evidence and few prosecutions have come to light.

The FATF report added that other sports especially vulnerable to criminals included cricket, rugby, horse racing, motor racing, ice hockey, basketball and volleyball. Its recommendations include improving awareness of the problem, greater financial transparency, imposing similar regulations internationally and better co-operation between countries.