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HMRC Raid on Football Clubs – snatch of the day

Image Rights, Salary and Taxes

A footballer’s "image" creates a "value" which the Club pays to endorse and promote a number of specific commercial deals. The value is what the Club expects to generate and pays the player for those rights.

That value is transferred to the player’s personal image rights company and the contract with the Club limits the player’s personal deal options, such as the player cannot endorse another sponsor or seek to share in revenues from other personal deals.

Standard Premier League employment contracts are generally restrictive and it is crucial for the Club to contract separately with the player's image rights company to have control of those rights to endorse particular products and services.

Consequently, a player's engagement terms are likely to be an employment contract with an image rights agreement being separately negotiated.

Clearly, this is a matter which is open to abuse and where the salary is reduced and the image rights inflated, then that becomes a tax issue - a matter HMRC will scrutinise at every turn.


Consequential taxes and benefit to the Club

In terms of taxes, PAYE and Employees NICs are deducted from the payments to the player, but the Employer’s NICs increase the total cost to the Club; however, the image rights payments are charged to corporation tax by the player's image rights company – the Employer’s NICs savings to the Club are considerable.

However, there needs to be commercial justification how that deal had been valued and how the club had exploited those rights as part of its wider commercial strategy. 


HMRC's Capped Deal - the image rights offer

HMRC and Clubs understand that higher profile players are marketable assets off the field and commercial partners are keen to engage with high profile clubs.

If proportionate, there were legitimate ways to structure payments to players for performance and also image rights in return for endorsing particular products and services.

Broadly, I believe HMRC's offer to all Premier League clubs was capped:-

  1. The Stage 1 Cap was that a club can make a maximum total image rights payments to all players image rights companies of 15% of commercial income. For example if the commercial income is £100M, then the maximum payments to image rights companies are £15M.
  2. The Stage 2 was the player cap as 20% of the total salary payments made to a player in the tax year.
  3. Clubs needed to write to HMRC if they wanted to take up the image rights offer.



Many footballers will not be UK domiciled for tax purposes and will hold their image rights through a non-UK company. This may mean that the payments escape UK taxes altogether.

Generally, if an image rights deal with HMRC and payment arrangements were deliberately falsified (or breached) resulting in tax consequences that deal is open to an HMRC tax fraud investigation. Also, any diverted/off-record payments to evade tax will be subject to an HMRC tax fraud investigation, which may result in criminal prosecution.


Chris Leslie, Director for and on behalf of Tax Networks Ltd

(M) 07852 700634 and




Twitter @ChrisALeslie