A record 329 professional footballers are under investigation for suspected tax avoidance, according to UK newspaper The Sun.
The report said that English Premier League stars are among those being looked into — the most since HM Revenue & Customs (HMRC) started keeping figures.
The total probed in 2021/22 is up from just 93 the season before.
Some 31 clubs and 91 agents are also reportedly being investigated.
International Adviser contacted HMRC but it did not reply in time for publication.
Crackdown
This comes as HMRC has started to actively investigate serious tax fraud in football, according to accountancy group UHY Hacker Young.
The UK taxman has appointed an officer to act as a liaison between the Football Association’s football compliance project, which investigates unpaid tax among players, clubs and agents, and its elite fraud investigation service, which houses HMRC’s specialist criminal fraud experts.
They will look to crack down on tax avoidance, which in football is often in the form of ‘agent fees’.
This is money that agents are paid by a player to manage a transfer – which can total in the millions of pounds.
In practice, these fees have often been paid by the club rather than the player.
HMRC has made clear that this is a taxable ‘benefit in kind’ for the player and failure to pay tax on it is subject to investigation and penalties.
Another area HMRC is focusing attention to try and uncover unpaid taxes is in ‘image rights’.
Players will often set up companies for the sole purpose of selling their image for sponsorship reasons.
By going through a company, they will only pay 19% tax, the UK’s corporation tax rate, rather than the 45% rate additional rate of income tax.
Concerns
UHY Hacker Young believes the move shows HMRC’s investigations into football have now moved into the area of serious tax evasion rather than tax avoidance.
Elliott Buss, partner at UHY Hacker Young, said: “The football compliance project linking up with HMRC’s elite fraud unit means the tax authority is very concerned about the significant amounts of unpaid tax in the sport.
“HMRC sees football as an industry where millions of pounds in tax can very easily go unpaid. It is determined not to let that happen.”
The UK taxman can investigate parties within the football industry by requesting that records are kept between the different parties involved.
HMRC can ask for letters between an agent and a club, texts, and messages such as WhatsApp and emails.
Buss added: “HMRC believes that a lot of players use agent fees and supposed image rights ‘loopholes’ to lower their tax bills.
“HMRC has been clear that these methods don’t work and that failure to pay tax in full will be pursued with investigations.”
