The image rights of footballers nets them a hefty sum of money. Wayne Rooney receives £760,000 a year from Man Utd.
Usually these footballers form a corporation to bring the tax rates down to 21% or 28% rather than declare it as individual income which would entail paying rates as high as 50%.
British tax authorities are now claiming that this money obtained through the sale of image rights construes personal remuneration. If proven this could mean footballers and their clubs can be slapped with a huge bill in back taxes to the extent of £100m. Accordingly, many top players have been sent letters asking for their club contracts and invoices. Man Utd is already contesting a £5.3m tax bill.
The other part is that foreign players like Fernando Torres can offshore their company and escape paying even more tax. Such won't be the case if the image rights payment is considered personal income.
Not that these footballers are living a hand to mouth existence. Much of their more irksome off the field behaviour is due to their making entirely too much money. But I think they should be given a break. Let them pay the new rates if their contracts are found in contravention but don't make it retrospective. This I think is fair.
As for the naysayers gloomily forecasting these socialist programs will kill the Premier League and lead to an influx of top talent to the lower tax Liga, Serie, and Bundesliga. Relax. The Premier League with its global reach and its lucrative TV and merchandising money cannot be touched. India and China offer vast and as yet untapped potential to swell the Premiership coffers. An advantage they enjoy over every other league. Spain's economic doldrums is also forcing it to consider raising tax rates on players.
The Sun and Daily Mail will carry on with the business of filling us with juicy twaddle about the excesses of the footballers. We will still enjoy the presence of the WAGs. And Premiership clubs will be the target of takeovers. All for the minor inconvenience of Ashley Cole waiting a day more for his Bugatti. But by the looks of it might not be the tax authorities that he should be worried about.
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