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Sport tax update: Football clubs kick back in tax counter-attack
Those familiar with Britain’s national sport – football – will recognise how the style of play of many of the country’s top clubs has changed in recent seasons.
Led by the likes of Liverpool’s manager Jürgen Klopp, teams have developed a fondness for something known as ‘counter-pressing’, harrying opponents until they surrender the ball and the initiative in a match.
It could be argued that the energetic and somewhat aggressive approach has spilled over into the way that some sides conduct their dealings with the taxman too.
Almost two years ago, a number of leading clubs, including West Ham and Newcastle, found themselves the subject of raids by HMRC.
As I commented at the time on this ‘blog and to a number of national news and sports media, the episode was believed to have stemmed from concerns in parliament and at the Revenue that some of the sport’s biggest names weren’t paying enough tax on their share of soccer’s riches.
Over a number of years, the taxman had been attempting to tackle the increasing amounts pocketed by players able to exploit their image rights.
However, whilst football these days is often a speedy, highly athletic pursuit, HMRC’s investigation into the sport in England and Scotland rumbles on.
Earlier this week, it emerged that the Revenue continues to scrutinise the financial affairs of 173 players, 40 clubs and 38 agents .
That news coincided with the announcement in Spain that former Ballon d’Or winner, Cristiano Ronaldo, had agreed to pay nearly £17 million and had been given a two-year suspended jail term after admitting hiding image rights income during part of his time with Real Madrid.
Ronaldo had previously denied accusations of wrongdoing by the Spanish tax authorities.
Such revelations might have been expected to put clubs at home and abroad very much on the defensive.
Nevertheless, Premier League clubs have engaged in something of a communications counter-press to restate their value not in terms of trophies but tax.
A new study has concluded that clubs and their star performers paid £3.3 billion in tax during the 2016-17 season – up some 50 per cent from the last time such research was undertaken three years before.
One-third of that total contribution to the Treasury came from the well remunerated playing staff who, according to analysis published last year, earned a total of £2.5 billion during the same season.
These are considerable amounts, yet I reckon that the taxman will keep his eyes firmly on the ball.
With such sums, it’s perhaps not a surprise that HMRC is interested in football or that the tax paid by football has become something of a political football in itself.
I sincerely doubt whether boasting of the amounts handed over by to the Treasury by English football’s top tier will be enough to persuade HMRC to take its enquiries elsewhere.
As the Revenue has shown in its pursuit of individuals who have failed to declare gains from offshore income, it is quite prepared to allocate extra time to its investigations.
Confronting HMRC is not like facing another other wily and skillful opponent. After all, it’s also the referee.
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