HMRC investigations into footballers jump dramatically in 2019/20

The number of footballers being investigated by the taxman rose dramatically in 2019/20, up from 87 individuals in the previous year.

The number of investigations into the tax affairs of football agents also rose dramatically, more than doubling from 23 in 2018/19 to 55 in 2019/20.

The number of players under investigation is the equivalent of nearly ten 25-man squads. According to UHY Hacker Young, the increase tallies with greater interest in the image rights regularly negotiated by players as an extension to their salary.

Image rights allow a club to use the name and likeness of a player, as well as the actual individual when appropriate, to market and sell club products.

Though a player's wage is faces a 45% income tax charge, image rights are taxed at the 19% corporation tax rate, making it a far more lucrative mode of payment for the player.

According to UHY Hacker Young, HMRC believes many of these deals amount to tax avoidance, particularly in cases where players who are not household names are paid a significant percentage of their compensation in image rights payments. In some cases image rights companies are based offshore, reducing tax paid even further.

The tax authority's overall additional tax collected from investigations into professional football in 2019/20 was £73.1m, more than double the £35.3m collected a year earlier.

UHY Hacker Young partner Elliot Buss 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 image rights of the likes of Paul Pogba and Mohamed Salah are undoubtedly worth millions of pounds a year. 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."

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• Tax planning