I’m not kicking a ball, I’m being looked at.

Professional footballers must have a great life. Playing football and earning significant amounts of money. Oh, and using some very clever tax advisers…

There are serious amounts of money being paid to some of the top footballers. Payments of in excess of £200,000 per week are fairly common (over £10 million per year).

This income doesn’t simply go into the tax return as salary. No, there are far more sneaky/clever [delete as you feel appropriate] ways of minimising the tax liability (or should I say maximising the after-tax income).

One of the methods used to minimise the tax is to make two types of payments to the player.

One would be for playing football whilst the other would be for “image rights”.

“What are image rights?” I hear you say.

Well, the basic idea is that the player would agree to let the football club use his image in any sponsorship or TV deals that the club has.

Without going into too much technical detail, the key difference from a tax point of view is that the payments made to the player for playing football would be classified as employment income and would be taxed at 45%.

Payments for image rights on the other hand would in effect be rental payments for an intangible asset. Players would assign their image rights to a company (where they could be the 100% shareholder) and the company would only pay corporation tax of 19% on the income.

With the globalisation of the Premier League, there are now numerous players who are not tax domiciled in the UK and if their image rights were channelled through a non-UK company they could potentially escape tax altogether.

Given the size of the payments involved there’s a lot of tax at stake. The Treasury in the UK has just initiated a project on players’ image rights and government technical experts will visit all English Premier League, Championship and Scottish Premier league clubs to review matters.

In the meantime, most of the readers of this blog are not professional footballers but instead undertake far more interesting finance and accounting activities in an office. Why not suggest to your boss at your next pay review that you’d like image rights instead of a pay rise so that you can receive more tax advantageous rental income from an intangible asset via your personal company…

Manchester Utd and Deloitte

Deloitte has stated that Manchester United are better than Real Madrid and Barcelona. Now before anyone starts getting concerned that Deloitte are moving away from[..]

A football star who can't kick...

When you were young did you dream of being an accountant when you grew up? My guess is that most of you probably didn’t fall[..]

Forget about the football, what about the shoes?

The football World Cup is well under way and as well as being the world’s leading football fiesta it’s also one of the top events[..]
#problemswithreturns
It’s common knowledge that high street shops are struggling. A number of household names have gone (or are going!) out of business and one of[..]
Step on it...
You probably haven’t heard of Klaus Maertens but I reckon that most of you will have seen what he started. Klaus was a German soldier[..]
A nice snappy idea...
The Carlsberg Group is one of the oldest brewing groups in the world. They were established way back in 1847 and their portfolio of products[..]
Laziness and intelligence.
Are you lazy? Do you know anyone who is lazy? Whilst a lot of you won’t admit to being lazy (and I’m sure most of[..]