Accountancy Firm UHY Hacker Young reports
that HMRC opened 246 investigations into the tax affairs of footballers in the
financial year to 31 March 2020, up from 87 in the previous year. HMRC is
focusing on the use of image rights, where players are paid a premium on top
of their salary for the use of their image by the team for advertising
purposes. The extra money is often paid to a company set up for this purpose,
attracting 19% corporation tax rather than being taxed at the 45% income tax
additional rate.
While household-name Premier League footballers may well
command a significant premium for image rights, payments to lesser-known individuals
may be more difficult to justify on commercial grounds.
Andrew Parkes, national technical director at Andersen in the
UK commented: ‘HMRC have clearly tested the water and realised that there are
rich pickings from lower division footballers who are being paid for their
image rights as if they are Ballon d'Or winners. Uncommercial payments are
always going to lead to a home win for HMRC’.
The number of investigations into football agents increased to
55 in 2019–20, up from 23 in the previous year with HMRC seeking to uncover
cases where agents’ fees from transfers are not declared correctly for tax
purposes.
Accountancy Firm UHY Hacker Young reports
that HMRC opened 246 investigations into the tax affairs of footballers in the
financial year to 31 March 2020, up from 87 in the previous year. HMRC is
focusing on the use of image rights, where players are paid a premium on top
of their salary for the use of their image by the team for advertising
purposes. The extra money is often paid to a company set up for this purpose,
attracting 19% corporation tax rather than being taxed at the 45% income tax
additional rate.
While household-name Premier League footballers may well
command a significant premium for image rights, payments to lesser-known individuals
may be more difficult to justify on commercial grounds.
Andrew Parkes, national technical director at Andersen in the
UK commented: ‘HMRC have clearly tested the water and realised that there are
rich pickings from lower division footballers who are being paid for their
image rights as if they are Ballon d'Or winners. Uncommercial payments are
always going to lead to a home win for HMRC’.
The number of investigations into football agents increased to
55 in 2019–20, up from 23 in the previous year with HMRC seeking to uncover
cases where agents’ fees from transfers are not declared correctly for tax
purposes.
