Market leading insight for tax experts
View online issue

Spurs FC severance payments: remuneration or damages?

Speed read

At a time when it wished to reduce its wage bill, Spurs FC persuaded two of its players to accept transfers to another club in return for substantial severance payments. The payments were made pursuant to FIFA rules providing that, if a player’s fixed term of employment was terminated by mutual agreement, compensation was to be paid. HMRC assessed the payments to income tax and NICs on the basis that, like contractual payments in lieu of notice, they were earnings from the employment. However, Spurs FC argued that compensation paid to achieve a termination by mutual agreement did not constitute earnings, but was taxable (above £30,000) only under the termination payment provisions of ITEPA 2003 s 401, and it made no difference that the compensation was provided for in the employment contract. The Upper Tribunal agreed.

If you are not a subscriber, subscribe now to read this content.
If you are already a subscriber, sign in
Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this article in full.