What happens, roughly, is as follows.
Club signs overseas player. Normally he'd be on 40grand, but pay 40% tax here in the UK, but get the tax back when he leaves and then pay it again when back home (depending on international taxation agreements).
Instead the club pays him a minimal amount while in the Uk and the rest is paid into an account overseas (tax heaven obviously) and when he leaves UK for the final time he transfers the money to his account at home. He stops off in, say, Singapore and checks the transfer has gone through. He then completes his journey home. When he gets there he pays no tax on the income as he has technically already paid (albeit in a tax haven).
It's good for the player because he pays less tax and keeps more money. It's good for the club because they pay a little bit less for a player than they would normally, and also it means there is more room in the salary cap to spend on other players.
It's very common in sport and most areas of big business. That's why so many Russian billionaires are based in London. They pay themselves a small wage for work done in the UK and pay little tax on it, and then pay themselves in an offshore account for other work done internationally.
The loser is of course the taxman. Or to put it another way, everyone else who pays all their taxes and expects others to do the same as part of a social contract. But there you go.
