29 July 2021
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2 min read
The UK's HM Revenue & Customs clawed back around £464m from football players, clubs and agents after a six-year probe into the sport, the Daily Mirror has reported today (29 July).
Over the last year HMRC recovered £55.6m following investigations into 93 footballers over potential tax avoidance breaches.
A further 23 agents and nine clubs are under investigation, according to a Freedom of Information request revealed by the Daily Mirror.
We are currently in active discussions with the UK tax authorities over a number of tax areas in relation to arrangements with players and players’ representatives."
HMRC had collected £463.9m "by tackling non-compliance in the football industry" since 2015, largely by reaching settlements on allegedly unpaid taxes.
The tax probe focused on image rights cash paid to players by clubs. Image rights packages boost multi-million-pound player contracts, with the extra earnings taxed at a lower rate.
Big name stars often set up companies to run their image rights deals, which are taxed at the 19% corporation tax rate rather than the 45% high-earner income tax rate. For overseas players, the savings could be bigger as part of the payments could be made offshore.
The Mirror further cited Man Utd's accounts, published earlier this year, which said: "We are currently in active discussions with the UK tax authorities over a number of tax areas in relation to arrangements with players and players' representatives.
"It is possible in the future, as a result of discussions between the group and UK tax authorities, as well as discussions UK tax authorities are holding with other stakeholders within the football industry, that interpretations of applicable rules are subject to challenge and could result in a liability."
Recent Newcastle United accounts also said the club "received claims from HMRC relating to alleged underpayment of tax and national insurance, and interest.
"The matter remains in the hands of legal advisers. There is insufficient information to make a reliable estimate of either the unaccrued amount of any liability or when any such sums may become payable."
Last year 246 players were under investigation, but the number of cases has fallen as HMRC focuses on helping businesses over the pandemic.
