News

Football’s taxing season - 2010-05-25

The FA Cup final on Saturday 15 May 2010 heralded the end of a gripping 2009-2010 FA Premier League football season. Whilst some footballers are taking part in the World Cup and some are having a well earned rest, the wheels behind football do not stop turning just because the season has ended.

Clubs will be reviewing their resources for next season and may engage football agents to recruit new players. Football agents will be looking for new contracts for their players who may be out of contract or seeking to extend existing contracts. End of season squad bonuses will be determined and paid and, like any other business, football clubs will be preparing the end of tax year information to pass on to their employees including their players. For the footballer, now is the ideal time to visit your accountant and to ensure that all information is supplied to enable him to fully complete your personal Self Assessment Tax Return.

Remember, if you are a footballer earning more than £100,000 per annum, and/or a director of a company, or a foreign national, or have rented property, or have some self employed activity, you will be required to complete a Self Assessment Tax Return. What is more, you are required to contact HM Revenue & Customs to ask for a Tax Return to be sent to you for completion if you fall within any of these categories and have not already been sent a Tax Return to complete and submit.

If you are a footballer who owns a limited company, now is the time to start the process of asking your accountant to prepare the company accounts, Corporation Tax computations and the Corporation Tax Self Assessment Tax Return ready for submission to HM Revenue & Customs.

However, that may not be the end of it. What if you are:

in the process of new contract talks?
about to have your contract terminated by your club?
about to be transferred to another club?
about to have a loan move to another club?
in the process of negotiating a sponsorship/endorsement deal?
due a testimonial next season?
a foreign footballer who has just arrived in the UK?
required to leave the UK because of the transfer to a club in another country?
benefiting from an image rights arrangement?
due to play or have played in either the Champions or the Europa league?
about to have a squad/discretionary bonus paid to you?
subject to an HM Revenue & Customs investigation?

The above list, which is not exhaustive, highlights some key events that can quite easily affect any footballer. Often the last thing that is considered is the tax position of each event, which means that players could be missing opportunities to make tax savings. This should not be ignored as most Premiership, and some Championship players, are likely to be paying the top rate of income tax of 50%. In some cases it is also possible for the football club to benefit from savings, particularly NIC.

In addition, some of the above events will have an immediate impact on the footballer and his family who might have to go through the upheaval of selling their family home and looking for a replacement. It may be that the footballer has an idea that he wants to turn into a business, or he wishes to start a property portfolio or a charity. In all of these cases, the footballer will need strategic tax advice to ensure that he does not lose out on any benefits that may be claimable.

Whilst I take my hat off to every footballer that has completed, or is about to complete, a Self Assessment Tax Return, you need to ensure you have access to the expertise to put in place the appropriate arrangements that can help to legitimately save you tax.

If you would like to address some of the possible tax concerns that you may have before the new season starts, on a confidential basis, please feel free to contact me to arrange a free consultation.

Joseph Brown is a Senior Tax Consultant with Littlejohn. Joseph specialises in looking after the tax affairs of a number of sportsmen and sportswomen. To contact Joseph either call 020 7516 2252 or e-mail jbrown@littlejohnllp.com