According to The Times, footballers, including most of the England squad, are using an arrangement agreed with the UK tax office that allows them to cut tax on earnings related to ‘image rights’ where stars get paid to lend their name to products and advertising.
Herrera and Azpilicueta
The paper said it had seen documents showing a ‘blueprint for the tax scheme’ used in correspondence related to two Premier League players – Ander Herrera of Manchester United and Cesar Azpilicueta of Chelsea.
In one email, the deal is explained by Peter Hackleton from Saffery Champness, an accountant who set up the image rights companies of the two players.
The scheme involves funnelling money that players earn from image rights via a company, so that they are subject to corporate tax rates rather than income tax, a practice which dramatically reduces the footballers’ personal tax bills.
Company pensions
England and Manchester United captain Wayne Rooney allegedly has £8.95m ($11.25m, €10.65m) in his image rights company Stoneygate, while England goalkeeper Joe Hart has amassed £2.31m in JCLC Promotions.
Another source told The Times: “Firms are advising their footballer clients to use the companies for their pensions.
“They build up cash in their company during their career and benefit from the low rate of corporation tax at 20%, which is set to fall to 17%. When a player retires they can wind up the company and transfer all the money to their personal account for as little as 10% tax.”
Hackleton added that HMRC had ‘agreed formally with the clubs’ that image rights payments do not exceed 20% of the players pay package or amount to 15% of their commercial revenue.
“If clubs sign up to this deal with HMRC all they have to do on an annual basis is report HMRC the payments made to IR [investor relations] companies with a quick summary of which campaigns the player’s image has been used in,” he explained.
“Nothing will be published’ and ‘all clubs have been sent details of the deal by HMRC.”
HMRC denial
HMRC has denied striking any formal deal with football clubs, revealed The Times.
The revelations come just days after a senior official revealed that tax authorities are currently investigating 43 football players and 12 clubs over their use of offshore companies to avoid paying tax on money earned through image rights in the UK.
Meanwhile, the Premier League has issued a statement admitting that clubs have established ‘guiding principles’ for players after talks with HMRC which allowed clubs to pay players 20% of their remuneration as image rights.
Football leaks scandal
Last week, a syndicate of European newspapers accused football legends Cristiano Ronaldo and Jose Mourinho of dodging millions of dollars in tax by channelling money to offshore tax havens.
The Dutch newspaper NRC alleges that Ronaldo moved €63.5m to the British Virgin Islands (BVI) at the end of 2014, while Mourinho is accused of stashing €12m in a Swiss account again owned by a BVI-based company. Both have denied the claims.
