The Mail on Sunday
England players in tax row with FA
ENGLAND’S footballers are on a collision course with the Football Association over who will pay the tax on their image rights payments.
The entire England squad, including Harry Kane and Jordan Henderson, are being investigated by HMRC over their England pay. The probe relates to image rights payments made to Gareth Southgate’s team by the Football Association.
Until now, most players have set up separate commercial companies to manage their off-pitch income and their firms pay corporation tax at a rate of 19 per cent — compared to the 45 per cent top tax rate for their on- pitch salaries. However, HMRC recently demanded the payments must be subject to income tax and National Insurance. Tax officials met with the FA, players and lawyers to confirm they were clamping down on the payments.
FA officials and players are also negotiating among themselves over who will pay the additional tax demands. A source close to the talks said: ‘HMRC has said all image rights payments must be treated as income for tax and are not allowed to be paid to player companies. If the FA pay out then the players will be liable for the tax payments, but the players are digging their heels in. They are paid by the FA to do work for their sponsors and partners — the players believe the FA should pay the tax at source.’
The FA faces a serious problem in the event it cannot resolve the tax situation.
A worst-case scenario could see the players boycott promotional work commitments, something the FA will be keen to avoid with Euro 2020 just two months away.
The FA would not comment on the matter. It is understood all relevant parties have continued to engage with HMRC to ensure all payments are correctly taxed. The confidential talks are set to continue.
Image rights arrangements allow the FA to pay players for their involvement with the national side’s commercial work with sponsors. Regular England squad members each earn £ 150,000 a year from commercial agreements. The image rights are paid out on top of playing fees, which the players donate to charity.
The Mail on Sunday has also discovered the FA has not been able to reach an agreement with players over plans to deal directly with them over future commercial work rather than having to go through third parties.