43 top footballers facing probe over ‘tax dodge’

DOZENS of wealthy footballers are being investigated for using income from image rights to dodge tax.

HMRC bosses told MPs the practice was rife, with 43 players, 12 clubs and eight agents under investigation.

They disclosed that a taskforce had clawed back £158 million from clubs in only two years from the scheme.

Giving evidence to the Commons public accounts committee yesterday, chief executive Jon Thompson described it as the ‘biggest problem in football’.

The details have emerged after the Daily Mail exposed in October that HMRC had struck secret deals with superstar players, enabling them to reduce their tax bills.

Mr Thompson said the elaborate tax dodge, which typically involves funnelling money from image rights into shell companies set up in tax havens, was legal and was also common among highly paid actors.

But MPs said the scam was ‘not just offside but downright crooked’ and questioned why HMRC had allowed Premier League stars to get away with ‘bending the law’.

Committee chairman, Labour MP Meg Hillier, described the behaviour as ‘extraordinary’ and accused HMRC of ‘endorsing’ it.

Mr Thompson refused to name the individuals or clubs involved but HMRC’s head of enforcement and compliance, Jennie Grainger, said a dedicated team had been set up to look at image rights, football, other sports and the entertainment industry.

Under the deal reached in the 2014-15 season, clubs were told they can pay up to a fifth of players’ pay to ‘image rights’ firms rather than as part of their wages. This means the player can avoid paying income tax.

Once the income from image rights has been channelled into the shell company, it can be drawn in the form of a dividend and subject to a tax rate of between 7.5 per cent and 38.1 per cent in the UK – much lower than the 45 per cent top rate. But if the income is drawn from an offshore firm and not declared to HMRC, it is tax evasion and illegal.

Tory MP Charlie Elphicke said: ‘People will feel the rule of law is being bent. Do you accept most of people in this country listening to that answer – the convoluted nature of image rights – will think this is not just offside, it’s downright crooked?’

HMRC has said it will review its image rights deal with the Premier League.

The FA declined to comment but a Premier League spokesman said: ‘Image rights as a source of income are recognised in the UK.’