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HMRC investigations into footballer image rights

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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.

Issue: 1499
Categories: News