Champs docked 35 points in extraordinary English rugby scandal

English rugby union champions Saracens say they will appeal a 35-point deduction and a STG 5.36 million ($A9.99 million) fine after they were found guilty of breaching salary cap regulations.

British media reported the breaches related to England internationals Owen Farrell, Maro Itoje, Mako and Billy Vunipola entering into business partnerships with the club's chairman Nigel Wray.

"Saracens Rugby Club failed to disclose payments to players in each of the seasons 2016-17, 2017-18 and 2018-19," Premiership Rugby said in a statement on Tuesday.

"In addition, the club is found to have exceeded the ceiling for payments to senior players in each of the three seasons.

"The Salary Cap Regulations stipulate that a points deduction may be imposed in the current season (2019-20) only. The sanction has no bearing on any other domestic or European competition."

Saracens have been hit with a huge penalty for a salary cap breach. Pic: AAP

Saracens said they were "shocked and disappointed" by the sanctions imposed.

"The club is pleased the panel acknowledged it did not deliberately attempt to breach the salary cap and steadfastly maintains that player co-investments do not constitute salary under the regulations," the club said in a statement.

"This view is supported by independent legal and professional experts. The club will continue to vigorously defend this position especially as PRL precedent already exists whereby co-investments have not been deemed part of salary in the regulations."

The club also stated the panel's interpretation of the regulations were "detrimental to player welfare" in the league.

Wray, who has been involved with Saracens since 1995, said the punishment was "absolutely devastating" for the club and its fans.

Club to ‘appeal all the findings’

"It feels like the rug is being completely pulled out from under our feet," he said in a statement. "We will appeal all the findings."

Saracens achieved English rugby's premiership and European double last season. Pic: AAP

Saracens, who accomplished the Premiership and European double last season, were fourth in the standings this season with nine points from three games before the punishment was announced.

The points deduction will place them last in the standings on -26 ahead of Saturday's trip to Gloucester and in danger of relegation from the top flight if they end the season at the bottom of the table.

The club will be allowed to seek a review and if they do, the sanctions will be suspended pending the review's outcome.

The Premiership Rugby salary cap regulations were introduced in 1999 to ensure the financial viability of clubs in the league and also provide a level playing field.

The current salary cap is seven million pounds, which does not include two 'Excluded Players' whose salaries are outside the cap.