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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…

Goodbye tax advisors?

Do you know anyone who works in tax?

If by any chance you are in Australia then if I ask you this question in 5 years’ time, as a result of Ailira the answer may well be “no, as no-one works in tax”.

“Who is Ailira?” I hear you say.

Ailira is the brainchild of Adelaide based tax lawyer Adrian Cartland and stands for “Artificially Intelligent Legal Information Resource Assistant”.

Mr Cartland created Ailira to help people with their tax affairs and believes that she could eventually replace human tax agents.

He told the Australian Business Review that “Your tax agents will probably be gone within five years”.

What was interesting was that although to a certain extent Ailira functions like a search engine, you can ask it tax questions in the same way that you would ask a person who works in tax.

Mr Cartland said that “The one thing we had difficulty with is that people are so used to doing keyword searches that they struggle to ask a question as you would to another human.

“So we did some upgrades of Ailira’s interface to encourage people to treat Ailira like a human, more in plain English.”

That’s an interesting phase “plain English” as anyone who has worked in tax or studied tax will appreciate that it’s not always possible to explain tax in plain English as the tax laws can be pretty complex.

Still, good luck to Mr Cartland and importantly, good luck to Ailira who by the sound of things may well be doing a lot of work in the future.

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 finance and becoming football pundits, I should stress that I’m referring to the Deloitte Football Money League.

Deloitte has been compiling the Football Money League since 1996/97 and the League lists the top 20 clubs in the world for revenue in a football season. They have just released the figures relating to the 2015/16 season and a few records were broken.

The combined revenue for the 20 richest clubs in the world grew by 12% and reached a new high of £5.5 billion.

There was a change at the top though as the Spanish club Real Madrid who had topped the table for 11 years were toppled by Manchester United who had revenue of £515 million. This in itself was the highest figure recorded by a football club in a season.

The Deloitte Football Money League measures a club’s earnings from match day revenue, broadcast rights and commercial sources, and ranks them on that basis. The study doesn’t include player transfer fees though.

More details on the report can be found here and the top 10 in the league are:

1 Manchester United £515.3m
2 Barcelona £463.8m
3 Real Madrid £463.8m
4 Bayern Munich £442.7m
5 Manchester City £392.6m
6 Paris Saint-Germain £389.6m
7 Arsenal £350.4m
8 Chelsea £334.6m
9 Liverpool £302.0m
10 Juventus £255.1m

It’s maturing nicely…

“Don’t worry, it’s secured with cheese” isn’t the most common phrase you hear when discussing the bond markets but a €6 million bond issue may well change that.

When a company issues a bond, the investor is lending money to that company in exchange for the bond. When the bond matures the company will repay the money that was lent (together with interest).

If you put yourself in the shoes of the investor, then what type of company would you invest in?

The chances are that you would be looking for large, well established and financially secure companies to invest in. That means that smaller companies generally find it challenging to raise funds via bonds.

An Italian cheese manufacturer has found a novel way around this problem.

4 Madonne Caseificio dell’Emilia is a relatively small Modena based cooperative firm which produces 75,000 wheels of Parmigiano cheese annually (nearly 2% of the world production of the famous cheese). It has issued a €6 million bond offering an annual yield of 5% with the capital being repaid in 5 annual amounts starting in 2018 and ending in 2022. The funds raised will be used to support their commercial expansion plans.

The interesting thing about the bond issue though is that it is secured by Parmigiano cheese worth 120% of the bond value. This means that if the company fails to repay the money the investors can get Parmigiano cheese from the company.

€7.2 million worth of cheese – that’s a lot of cheese! Let’s hope the bond matures nicely without any problems.

A good excuse to buy another handbag?

How much do the Louis Vuitton handbags cost?

A lot is the simple answer but some recent research by Deloitte’s has shown that the price of luxury items varies significantly around the world and foreign exchange movements play a big part in that valuation.

According to Deloitte, in US dollar terms London is now the “cheapest” city to buy designer and luxury goods.

Since the Brexit vote in June, at the time of writing the pound has fallen by more than 17% against the dollar (i.e. you need 17% more pounds now to buy the same amount of dollars you would have received back in June).

According to the research, on 7 October a Speedy 30 handbag from Louis Vuitton costs £645 ($802) in London, €760 ($850) in Paris and $970 in New York. China was the most expensive place to buy it with the handbag costing 7,450 Yuan ($1,115).

Nick Pope, fashion and luxury lead at Deloitte, told the BBC that “the trend in luxury pricing in the UK is being driven mainly by the depression on the sterling – thus making the same item more affordable in the UK than in any other luxury market”.

Of course, if your income is in British pounds then the cost to buy the handbag in London remains the same. If however your income is in another currency such as US dollars then it is $313 cheaper to buy in London than in China for example. If you are stocking up on your luxury handbags should you be planning a trip to the UK?

It’s not just the ladies from outside the UK who are buying luxury handbags who could be benefiting from the exchange rate movement.

Any male readers may be interested to know that a Brunello Cucinelli cashmere V-neck sweater now “only” costs £650 ($843) in the UK compared with $942 in France and $995 in the US.

$843 for a sweater?

Please form an orderly queue as you rush to the shops to buy one. Or maybe two…

Standing up for productivity.

How would you feel if your chair was taken away from you at work? Probably not too happy I would guess.

A recent bit of research though may make your boss think otherwise.

Scientists from the Texas A&M Health Science Centre School of Public Health installed “standing desks” in a call centre employing over 150 people. The standing desks could be adjusted so that the employee could work at them either sitting down or standing up.

Half of the employees were given sit–stand desks to use whilst the other half were given traditional sitting desks. The performance of the employees was recorded over a period of 6 months and the results were surprising.

Despite the employees who had the sit–stand desks only using the desks in the standing position for a third of the time, their productivity increased by 50%. Productivity was measured by the number of successful calls that the employee made to the clients with “successful” being defined as being when the company earned revenue from that call.

Each employee typically made in the region of 400 to 500 calls every month and the company wanted them to achieve on average 2 successful calls per hour. Those with the sit–stand desks achieved the target whilst those with the traditional seated desks averaged 1.5 successful calls per hour.

Dr Gregory Garrett from the centre was quoted as saying that “having the ability to move throughout the day really makes a big difference”.

So, is it time to introduce standing chairs in your office?

It’s a dog’s life…

Greece has had a bad time of it over the last couple of years in terms of their finances but a recent announcement by their Finance Ministry may result in animals coming to the rescue.

When I say animals, I should be more specific and say that dogs will be helping out and not just any dogs but dogs who can sniff out money.

Let me explain a bit.

It’s been well documented that Greece has had a few financial problems. There were fears that they would crash out of the euro. Capital controls followed and there was a new international bailout for the country.

As a result, a lot of the Greek population perhaps understandably didn’t feel that confident in trusting the banks to look after their cash and a significant amount of money is being held outside of banks.

From November 2014 to July 2015 over 50 billion euros was withdrawn from the banks and It’s been estimated that between 15 to 20 billion euros is still being held by Greeks outside of the banking system.

That’s a lot of mattresses to be storing cash under and people are looking at avoiding capital controls and instead take the money out of the country without the authorities knowing.

Taking a suitcase of cash out of the country is seen as a safe option for a lot of people.

So, where do the dogs come in?

Well, a recent posting on a government website said that a team would be put together to assess tenders for the provision of dogs whose job is to detect cash. The dogs would be in place to sniff out significant amounts of cash being taken out of the country at border points.

Given all the money problems in Greece, one big advantage of this plan is that the dogs won’t be paid in cash. Instead, they will be more than happy to be rewarded with a biscuit or two…

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 asleep at night dreaming of spreadsheets and calculators. Perhaps a more common childhood dream was playing for your favourite football team or being a famous actor or actress.

There have been some interesting developments recently though when it comes to playing for your favourite football team and some of the top teams are now signing players who will never be kicking a ball for their team. Instead, they will be representing their teams in the world of gaming, or to be more specific, football gaming such as EA Sports Fifa

Manchester City have recently signed Keiran Brown, an 18 year old gamer who has more than 12,000 followers on his YouTube channel.

Keiran will represent Machester City at Fifa esports tournaments where gamers sit in front of computers representing their team and watched by crowds of thousands of spectators.

Manchester City didn’t disclose how much Keiran will be paid but other professional gamers are reported to be paid in the region of £3,000 per month and can also win prize money at tournaments which can run into the thousands of pounds.

It’s quite a smart move for the club though as football games on consoles such as Xbox and PlayStation are extremely popular with supporters of the actual game.

Diegao Gigliani, vice-president of media and innovation at Manchester City was quoted as saying “As esport continues to gain momentum, it makes sense for our clubs to be part of the action and get closer to our fans, who love playing EA Sports Fifa as Manchester City. We will be a bigger presence at gaming tournaments, we will have more content through our digital channels and we will activate even more with our fans at matches and club events.”

So, in summary, if you want to play for your favourite football team but can’t kick a ball then maybe get out your Xbox and start practicing…

Is this the best time to leave the office?

When do you think it is a good time to leave the office on a Friday night? After all, if the sun is shining and you’ve got a nice weekend planned it would be good to be able to finish at a reasonable time.

In some jobs though there can be pressure to finish projects which legitimately means that you’ll have to stay late to meet the deadline.

In other companies though there can be a culture of staying late as there’s “always something to do” and never enough time to do it all or there can be pressure to stay late to “prove” that you are busy and working hard.

As an aside, when I was younger I used to work with a colleague who would bring in a spare jacket to leave on the back of his chair when he left the office at the end of the day – his boss would see the jacket on the chair together with an open file on the desk and the screensaver active on his computer and think he was still working hard and in a meeting somewhere else in the office.

Back to 2016 though and Credit Suisse, the leading investment bank, has introduced a new policy called “protecting Friday nights”.

In an email leaked to Reuters, Credit Suisse said it would be ordering all employees to stop working at 7pm on Fridays.

Marisa Drew, co-head of banking and capital markets in London reportedly told workers that she “had given a great deal of thought into how we can provide some time off for our bankers”. Ms Drew went on to say that this would allow “employees to make firm plans with family and friends and ensure that this time will be respected”.

So, good news for Credit Suisse employees as (unless they are working on a deal) they have to leave the office by 7pm on Friday.

When do they have to be back in the office though? Well, they have been told that they cannot go back to the office until midday on Saturday.

Yes, a whole 17 hours to relax, see the family and get some sleep…

This is shocking…

A lot of our readers are accountants or are training to be accountants. It should arguably follow therefore that you are good with figures. You are good with numbers and can manage your finances.

Not everyone though may be as good at managing their own personal finances and for any of you who may have problems controlling your spending, a new product will shortly be hitting the market which could be of interest to you.

A British company by the name of Intelligent Environments has developed a wristband that will deliver an electric shock to the wearer when they exceed pre-set spending limits.

The Pavlok wristband links to an individual’s online bank account and when a pre-set limit is exceeded a 255-volt electric charge is delivered to the wearer. The wristband is named after the Russian scientist Ivan Pavlov whose research showed that the behaviour of dogs could be altered by the prospect of reward or punishment.

Submitting yourself to an electric shock to stop yourself spending money does seem a bit extreme and with a cost of £120 then the buyer may well end up having an electric shock earlier than anticipated…