HMRC expands football tax probe
Total of 171 players, 44 clubs and 31 agents under investigation for suspicious tax activity relating to image rights
UK tax authorities have expanded their probe into British football, with nearly 200 players across 44 clubs, as well as 31 agents, now under investigation.
The figures, obtained by tax advisers UHY Hacker Young under the Freedom of Information Act, are nearly double the number of players and agents under investigation a year ago.
HM Revenue & Customs has “stepped up its efforts to crack down on tax avoidance in the beautiful game since it established the Football Compliance Project in April last year”, reports the Daily Telegraph. Since then, it has collected an additional £332m in revenue compared to 2015-16.
“HMRC sees the football industry as another potential cash cow and is coming down hard on players and clubs,” UHY Hacker Young’s Nick Hall told the paper.
UHY Hacker Young said that much of the suspect activity was likely to relate to player’s image rights.
Since 2000, professional players have been able to treat these payments, which might be for appearing in adverts or on video games, as separate to their playing income. Many have set up companies to receive this income, “theoretically allowing them to pay a lower rate of tax, but the taxman is keen to ensure that such savings are done legally” says the Telegraph.
Some of the world’s best players, including Lionel Messi and Christiano Ronaldo, have been handed massive fines and even suspended sentences over their use of image rights companies to avoid tax.
The Daily Mail reports that the football industry and HMRC have “an understanding” that players shouldn't receive more than 20% of their pay through Image Rights.
HMRC has also confirmed it has conducted talks with Spanish tax authorities, following high profile prosecutions of Manchester United manager Jose Mourinho and Old Trafford forward Alexis Sanchez.
The probe comes “amid a national debate over funding for grassroots football,” reports the BBC.
Former Football Association chairman David Bernstein recently said the Premier League should be taxed to improve facilities following the fall-through of the Wembley sale.
The sale of the national stadium to Fulham owner Shahid Khan for £600m, which the FA said would go towards improving grassroots football facilities, collapsed last month after the plan became “divisive”.
“It's a national disgrace,” Bernstein told BBC Radio 5 live. “The Premier League does pay some monies across to other parts of football but it is nowhere near enough.”