FOOTIE STARS IN TAX FARCE

HMRC probe use of ‘image rights’ to avoid top rate

FOOTBALLERS are being probed over an image rights scheme which helps avoid top rate tax.

HMRC is looking at 246 professionals after the number using it trebled in a year.

INVESTIGATIONS into 246 professional footballers have been launched by the taxman.

The number – the equivalent of 10 Premier League squads – has trebled in a year as HMRC embarks on a massive crackdown on image rights deals being used to avoid tax.

Fifty-five football agents are also being probed over their financial arrangements as part of a wider clampdown.

Accountancy group UHY Hacker Young said the number of players under investigation had soared from just 87 last year.

Elliot Buss from the firm said: “HMRC believes that lots of lesser-known footballers are effectively avoiding tax by getting paid huge sums for image rights that HMRC views as overpriced.”

The lucrative deals see players pocket extra cash on top of their salary in exchange for using their image in advertising and endorsements.

Alongside world-class stars, even obscure players from lower leagues are getting in on the action for what could be vastly inflated sums. The money is often paid to a company set up by the player which only has to pay 19% corporation tax – far lower than the 45% income tax top earners are hit with.

In some cases, image rights firms are offshore, cutting tax further. Mr Buss added: “Image rights of the likes of Paul Pogba and Mohamed Salah are undoubtedly worth millions of pounds a year.

Payments

“However, if you are second-choice left back in the Championship getting paid a great deal in image rights payments, then this is likely to trigger an investigation by the taxman.

“You may have to make a robust argument to HMRC to show how the value of the image rights has been arrived at.”

Officials are also trying to uncover cases where agents’ fees from big transfers are not declared correctly for tax purposes.

HMRC opened 25 investigations into football clubs in 2019/20, up from 23 in 2018/19.