Following concerns raised about tax avoidance through image rights, the UK tax agency is set to visit major league football clubs. This is after the Public Accounts Committee raised concerns about HMRC’s failure to ensure that high-net-worth individuals pay the right amount of tax on image rights.
In a 2000 court ruling, earnings from image rights are to be treated as a separate income stream from money earned playing football for a British Club. But a lot of evidence showed that there are potential irregularities in some of the footballers’ financial affairs, particularly on image rights tax.
With the renewed interest on this matter, however, Andy Brown, a Partner in Bird & Bird’s International Tax Disputes team, recommends that players prepare for when HMRC will challenge their financial arrangements, especially in terms of their remuneration packages.
HMRC is said to investigate anything that will be perceived as tax avoidance and will make improvements to the existing rules, giving clarity on payments of image rights.
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