Not such a beautiful game
HM Revenue & Customs (HMRC) has confirmed it is investigating the tax affairs of dozens of football clubs, players and agents for ‘potential irregularities’. According to a spokeswoman for the Revenue, 43 players, eight agents and 12 leagues clubs are under investigation around the issue of image rights.
The news comes as Manchester United’s manager, Jose Mourinho, has been on the front, rather than the back pages, for allegedly moving millions of pounds offshore to avoid tax on earnings (for the use of his image rights or product endorsement). Mr Mourinho strenuously denies the charges and is no doubt mounting a strong defence.
Earnings from image rights are treated separately from money earned from playing for a British club because of a court ruling in 2000, which stated that they should be treated as two separate income streams. The effect of the ruling means that footballers playing for British teams pay domestic tax on the income they earn from their club but are able to incorporate their image rights abroad, particularly if they have spent much of their career out of the country.
HMRC sees the issue of image rights as “the most significant risk in football” and has called on Chancellor Philip Hammond to review the tax rules for football stars who might be siphoning earnings from Premier League games into image rights companies based in offshore tax havens. The taxman evidently views this seriously, with an investigative team devoted to the beautiful game, and has reclaimed £158m in the past two years.
When an investigation is mounted, nothing remains secret, with investigators trawling through emails documents and accounts to see what the intent of a transaction was and where the resulting proceeds ended up. Forensic accountants leave no stone unturned.
Author: Roger Isaacs, 12 December 2016
Share on Twitter