Following consultation with Spanish tax authorities into recent high profile ‘image rights’ tax avoidance schemes. The UK’s HM Revenues & Customs (HMRC) is now investigating almost 200 footballers as part of its crackdown on tax avoidance in the sport.
According to a report in the Daily Mail, the number of players under investigation has risen from 181 in April to 198 today, with 44 Premiership and Football League clubs said to be involved. The number of Agents (Intermediaries) being probed has also increased from 21 to 29.
The investigation covers a range of areas from image rights loopholes, to the use of tax avoidance schemes.
A spokesperson from HMRC said: ‘HMRC carefully scrutinises the individual image rights arrangements between football clubs and their players to make sure the right tax is being paid in the UK.
‘We are carrying out visits to every Premier League club and most football league clubs, along with their players. We’re currently making enquiries into 198 footballers, 44 football clubs and 29 agents for a range of issues, including image rights abuse.’
The tax office added its ‘rigorous’ enforcement on the football industry has netted £329 million in extra tax.
Earlier this year former top-flight agent Jerome Anderson, who had the likes of Thierry Henry and Dennis Bergkamp on his books, lost a £1.2 million tax battle with HMRC.
We’ve reported on Tax Schemes that have been widely used in football previously and whatever your view on the morality of such schemes, what is apparent is that the players who took up these schemes will have done so only on ADVICE from people who are paid significant sums to look after their financial welfare. Their Agents, Intermediaries, Accountants and Financial Advisers. In many cases (we’d suggest all), the people who arranged these schemes will have been paid significant ‘comissions’ for arranging or introducing the players to them. We wonder, what happens to them?
Interestingly, one of the IYE Directors was asked to look at a Tax Avoidance scheme some seven years ago. It had been set up by a barrister who HMRC used to advise on tax issues. Our director was told the scheme was perfectly legal and it was, however he also enquired with HMRC, who told him plainly that although the scheme was currently legal at that time, HMRC believed this to be a construct to avoid the payment of tax due and as such, they would continue to fight so that in the future, they could retrospectively examine past tax records, claim back unpaid tax AND add fines. This is precisely what’s happening today.
It’s easy in hindsight to say this but it is nevertheless true, if IYE had been in existence and any of these players had used our services to check on these schemes, they would have been told NOT to get involved.
The consequences now facing many of these players is financial ruin, the loss of homes, often family breakdown and sadly even suicide. It cannot be overstated how much damage this type of unthinking advice causes.
One of our major roles at IYE is to prevent our clients from entering into fraudulent schemes or investments or which like these, schemes that could cause future problems. We have a range of investigative services to suit clients both large and small and are happy to discuss and fully investigate any potential investment and provide clear, simple to follow advice on the legitimacy of a proposed investment along with the people associated with it.