Staggering 249 professional footballers under investigation over tax avoidance breaches – which has TREBLED in past year
A STAGGERING 246 professional footballers are under investigation by tax chiefs. And the number of players being probed by HMRC over potential tax avoidance breaches has almost TREBLED in the past year. Freedom of information requests by accountants UHY Hacker Young have revealed that cases under investigation by tax officers during 2019-20 has risen by […]
A STAGGERING 246 professional footballers are under investigation by tax chiefs.
And the number of players being probed by HMRC over potential tax avoidance breaches has almost TREBLED in the past year.
Freedom of information requests by accountants UHY Hacker Young have revealed that cases under investigation by tax officers during 2019-20 has risen by 159, from 87 the previous season.
The cases may relate to image-rights deals, where players are paid extra money on top of their salaries for the use of their image by the club in advertising and endorsements.
Commonly this income is paid to a company set up by the player and it is only taxed at the 19 per cent corporation tax rate rather than the 45 per cent income tax rate paid by high earners.
And in some cases image rights companies are based offshore, which can reduce the money owed even further.
Elliott Buss, partner at UHY Hacker Young, said: “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.
“If you’re a 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.”
Figures released by the tax office to the national accountancy group confirm 55 agents are also being investigated — up from 23 in 2018-19.
The tax authority suspects there are cases where agents’ fees from transfers — which are paid by players and run into millions of pounds — are not declared correctly for tax purposes.
There are also 25 open investigations into football clubs for the tax year 2019-20.
HMRC’s overall additional tax collected from investigations into professional football in 2019-20 totalled £73.1million — with £60.1m of that coming from clubs.
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Buss added: “Despite having a very substantial income, many young footballers don’t get the advice they need when it comes to tax.
“Often they don’t realise they need to pay tax on the fees that the club pays the agent on behalf of the player when they sign a new contract.
“That frequently results in errors, investigations and hefty penalties.”
UHY Hacker Young also reported a big surge in players under investigation back in 2018.