Football Tax Investigations – A case of Poor Financial Advice?
Jon Thompson, chief executive of HM Revenue and Customs (HMRC) has advised the Public Accounts Committee (PAC) that some footballers and entertainers have income from image rights paid into offshore accounts, avoiding paying tax in the process.
This has implicated 43 players, 8 agents, and 12 clubs. HMRC is focusing their efforts on these individuals and entities believing they can recover significant sums in tax. Jon Thompson described the image rights issue as “the most significant risk in football” faced by HMRC. The PAC was advised that over the last two years £158 million has been recovered through clamping down on this practice.
This was confirmed by Jennie Granger, head of enforcement of HMRC. She added that entertainment and other sports were also under investigation.
Granger told the PAC, “Just on football itself, in the last two years, that team, and wider across HMRC, has brought in £158m in yield.”
In the year 2000 a court ruling concerning film schemes which at the time were being used by players to avoid paying tax, stated that image rights would be treated differently from other forms of income, a practice which Thompson now wants reviewed.
He said, “If it was for me, I would want to review this but I need to reiterate, under the case settled in 2000, that is the current law.”
Recently, European papers have accused Cristiano Ronaldo and Jose Mourinho of dodging millions of dollars in tax by using offshore accounts. Figures such as €63.5m and €12m have been cited by Dutch newspaper NRC.
Protecting Income from the Taxman
If the players under investigation are found to have avoided paying tax, there will be consequences for their actions. Look a little deeper, however, and what becomes clear is that they have probably been given poor tax and financial advice.
When managing your finances it is important you use a good financial adviser that can make your money stretch further but staying within the rules to avoid unnecessary headaches.
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Source: International Adviser
For more information, please contact Michele Carby at Holborn Asset Management on +971 50 618 6463 and on e-mail at [email protected]
