UK football stars using loophole to avoid paying millions in tax
By ANIMonday, January 17, 2011
LONDON - Top English Premiership footballers like Wayne Rooney and Gareth Barry are using a loophole in the government’s revenue and customs service to avoid paying millions of pounds in tax.
According to the Daily Mail, Manchester United star Rooney has saved almost 600,000 pounds over the past two years by using the tax loophole, while Manchester City’s Barry took home 135,000 pounds.
The Sunday Times has uncovered 55 players who are taxed at just 22 per cent because they get a large proportion of their total earnings from their image rights companies.
The players have two contracts with their clubs. They get a salary as a player and the other is for ‘image rights’ - earnings from shirts and other merchandising.
These royalties are paid into a company which is only liable for 28 per cent corporation tax rather than the 50 per cent income tax.
Players can take out loans from their companies where they only pay two per cent tax on the sum because it is regarded as a benefit in kind.
The revenue and customs service has confirmed that they are looking at players’ companies as part of their probe into image rights and tax avoidance.
They have demanded the money from the soccer clubs to make up for the shortfall in tax revenues after they overstated the proportion of players’ income that was coming from image rights. (ANI)
