Tax affairs of 246 footballers are being investigated.

https://www.theguardian.com/football...mrc-in-2019-20


Tax authorities increasingly concerned by tax loophole
Players pay 19% tax on image rights compared with 45% on wages
Paul MacInnes

HMRC does not believe some footballers are worth the amount they are being paid in images rights and suspect it is being used as a way to avoid 45% tax on wages. Photograph: Kirsty O’Connor/PA
The number of footballers investigated by HMRC rose dramatically in the tax year 2019-20, going up from 87 to 246 individuals, according to research by the accountancy firm UHY Hacker Young.

The figures show footballers and their image rights are coming under increasing scrutiny as the UK tax authorities look to clamp down on loopholes in the way players are paid.

The number of investigations into the tax affairs of football agents also increased substantially, more than doubling from 23 in 2018-19 to 55 in 2019-20.


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Hacker Young argues that this increase tallies with greater interest in the image rights regularly negotiated by players as an extension to their salary.

Image rights allow a club to use the name and the likeness of a player (as well as the actual individual when appropriate) to market and sell the club’s wares and those of their sponsors.

While a player’s wage, in the Premier League and Championship, will be levied with a 45% income tax charge, image rights are taxed at the 19% corporation tax rate, making it a far more lucrative mode of payment for the player.

While some players would be able to command enormous fees for their image rights and may have a more valuable brand than the club they play for, negotiating image rights is an increasingly standard practice among players with less name recognition too.


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Elliot Buss, a partner at UHY Hacker Young says: “HMRC believes that lots of lesser-known footballers are effectively avoiding tax by getting paid huge sums for image rights that HMRC views as overpriced.

“The image rights of the likes of Paul Pogba and Mohamed Salah are undoubtedly worth millions of pounds a year. However, if you are second-choice left back in the Championship getting paid a great deal in image-rights payments, then this is likely to trigger an investigation by the taxman. You may have to make a robust argument to HMRC to show how the value of the image rights has been arrived at.”

The kind of calculations that would be required to work out the value of a player’s image would include the amount of money they could charge for making a public appearance or for endorsing a product as well as the more traditional totting up around the sale of replica kits.

This doesn't surprise me at all, though that is a huge difference paying a fifth in tax compared to nearly half!

I am sure that most company accountant people are paid handsomely to look into "efficient" ways of paying their employees so why should football be any different?
One can only imagine how much the government is missing out on.

The accountant has done his job for the football club, now it's down to the lawyer.

It's down to HMRC to close the loopholes, as they have done previously. Accountants work around the rules at the time to the advantage of their client so at the moment, unless HMRC align corporation tax and income tax rates it will carry on.

I think HRMC might find it more lucrative if they spent their time forcing big blue chip tech companies to pay their fare share of tax, or demanded the onshoring of the billions in tax havens around the world being hiden away by the wealthy.

I mean footballers ARE paying 45% of their wages in tax and ARE paying tax on their image rights. Hardly the biggest tax scandal around.

Quote:

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Originally Posted by Hometown Unicorn!

I think HRMC might find it more lucrative if they spent their time forcing big blue chip tech companies to pay their fare share of tax, or demanded the onshoring of the billions in tax havens around the world being hiden away by the wealthy.

I mean footballers ARE paying 45% of their wages in tax and ARE paying tax on their image rights. Hardly the biggest tax scandal around.

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It's not the biggest , but I still think its worthy of investigation. Over the whole industry I'd imagine it adds up to a tidy sum

In my opinion absolutely no way to retrospectively penalise footballers for the image rights as whether they can get to a valuation or not, it’s so intangible that it’s hard for a court to levy a fine.

However the loophole should be closed off as it is a pisstake and morally wrong but every business in the land looks to offset its taxes as efficiently as it can. No doubt all these footballers just palm off finances to an agent and a accountant.

Quote:

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Originally Posted by Hometown Unicorn!

I think HRMC might find it more lucrative if they spent their time forcing big blue chip tech companies to pay their fare share of tax, or demanded the onshoring of the billions in tax havens around the world being hiden away by the wealthy.

I mean footballers ARE paying 45% of their wages in tax and ARE paying tax on their image rights. Hardly the biggest tax scandal around.

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For me it’s an easy win.

Let HMRC go for it and hopefully all the above as you’re saying

Quote:

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Originally Posted by Hometown Unicorn!

I think HRMC might find it more lucrative if they spent their time forcing big blue chip tech companies to pay their fare share of tax, or demanded the onshoring of the billions in tax havens around the world being hiden away by the wealthy.

I mean footballers ARE paying 45% of their wages in tax and ARE paying tax on their image rights. Hardly the biggest tax scandal around.

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Surely theres enough staff in HMRC to do both. I doubt they just focus on one thing at a time.

only 246 FFS investigate them all one by one ,we need the dosh to pay for our debt and much needed services ,they earn obscene money for a sport that inheritly is born of the backs of working class socialist folk , strange how we accept it ??

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Originally Posted by life on mars

only 246 FFS investigate them all one by one ,we need the dosh to pay for our debt and much needed services ,they earn obscene money for a sport that inheritly is born of the backs of working class socialist folk , strange how we accept it ??

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Footballers are predominately from working class backgrounds, and it's one of the only industries where the people generating the money actually get the lions share of it.

I know there's more to it than just the tax differential, but once the corporation tax is deducted the net is the company's money not the players. If he wants to take the money out of the company, then he has to pay tax on the dividend, so the differential isn't as great as first suggested. Theres almost certainly schemes available to distribute the dividends in the most tax efficient manner, but the original rates quoted are probably a little misleading.

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Originally Posted by The Bloop

Surely theres enough staff in HMRC to do both. I doubt they just focus on one thing at a time.

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Stop being sensible, :hide:

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Originally Posted by Rjk

Footballers are predominately from working class backgrounds, and it's one of the only industries where the people generating the money actually get the lions share of it.

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and that's good as long as the tax is paid in the UK