HMRC investigations into footballer tax affairs reaches record level
05 Mar 2020

A record number of footballers, clubs and agents in England are being investigated over tax payments.

HM Revenue & Customs (HMRC) is investigating the tax affairs of 330 footballers, 55 clubs and 80 agents, up from 173 players, 40 clubs and 38 agents in January 2019.

HMRC said it had recovered £396m from the industry since 2015.

The department said it expected “more compliance than previous years” after its “proactive handling of tax risks”.

It said it “looked forward to continued co-operation with clubs and players throughout 2020”.

HMRC had previously said it was making enquires into “tax risks”, including image rights, agents’ fees and dual representation – an agent representing both the club and player during a contract or transfer negotiation.

“We’re clear that everyone must pay what they owe under the law – regardless of their wealth or status,” the department said.

“HMRC have been investigating players and clubs over image rights for some time,” said football finance specialist Kieran Maguire, from the University of Liverpool.

“Image rights are a legitimate means of paying a player for off-field activities.

“Payments are usually made to a separate company set up to manage the rights.

“If HMRC feel that too much of the player’s pay has been diverted into this area [on which a player owning their image rights company would be due to pay Corporation Tax at 19%] they may decide that the money should be treated as wages [which would be subject to PAYE tax].”

HMRC is also investigating issues relating to VAT, agents based offshore if there is a suspicion of malpractice and payments to other parties, including when an agent may not receive or keep the entire fee from a player transfer, and instead a number of agents are paid.

Although clubs in England are obliged to send the Football Association details of all payments made to agents, this does not include payments to sub-agents.

HMRC began a dedicated “football compliance project” in 2017. Since then, £65m in tax has been repaid by clubs.

The amounts recouped from players and agents totalled £18m and £7m respectively from 2017-18 to the end of September 2019, the BBC found under the Freedom of Information Act (FOI).

By Alex Homer, BBC News, 3 March 2020

Read more at BBC News

Photo: Biser Todorov / CC BY 4.0

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