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Taxman cracks down on football

Her Majesty's Revenue and Customs (HMRC) have clawed back more than £330m in a crackdown on football, largely through agreed settlements. Pressure is building on the subject of widely used image rights payments in which stars are paid separately from salaries when used in promotional campaigns. In 2010 it was revealed that Wayne Rooney earned £760,000 a year from his image rights.

Currently HMRC has open 'inquiries' into 171 players, 44 clubs and 31 agents, a sharp increase from the numbers this time last year.

The crackdown follows the end of an agreement between HMRC and the Premier League under which clubs accepted limits on how much they could pay players for their image rights. HMRC has increasingly questioned the practice under which image rights payments are made to the companies holding the rights, rather than directly to the players or managers.

While a player's wages are taxed at standard rates, i.e., 45 per cent for most of the income of top flight players, fees paid to an image rights company are taxed at corporation tax rates, currently 19 per cent. Foreign players could make much bigger savings as part of the payments could be made offshore. It makes you think when income tax allowances could be frozen in the Budget, leading to a higher tax take for the less well off.

Nick Hall, tax manager at accountancy group UHY Hacker Young told the Financial Times, 'the tendency of some to push the boundaries has led to HMRC playing close attention to these structures [image rights companies], alongside other key areas such as payments to agents.'

In July former top football agent Jerome Anderson lost a £1.2m tax battle with HMRC: Tax avoidance own goal

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