Wednesday 19th January 2011
A number of top premiership footballers, including England Internationals Wayne Rooney and Gareth Barry, are employing loopholes in UK tax law to avoid paying millions of pounds in tax.
One such loophole - created by the Labour government in 2007 - is that companies can lend large sums of money to their directors which are then classified as a ‘benefit in kind’ and so are taxed at only two per cent. This means that players can channel income into their image rights companies and then lend it back to themselves to reduce their tax liability on large chunks of their incomes.By using this tax avoidance technique, Gareth Barry saved paying £135,000 worth of tax last year, while Wayne Rooney has saved over £600,000 over the last two years. A spokesman for Rooney said to the Sunday Times: “Everything that Wayne’s companies do is legitimate and within the letter and spirit of the law.”Footballers can avoid paying the 50 per cent tax rate in this way because they are only taxed 28 per cent on royalties from image rights. The Sunday Times has uncovered 55 players who are taxed at just 22 per cent overall because the majority of their total earnings are from image rights companies. These include Ashley Cole - former husband of X-Factor judge Cheryl - as well as Michael Owen, who owns eleven racehorses and has a developed property portfolio.Her Majesty’s Revenue and Customs lost a test case against the Arsenal players David Bergkamp and David Platt in 2000, but may be on stronger legal ground were they to attempt to challenge the practice of director loans. Now HMRC has demanded that Premiership clubs pay £100 million on behalf of their players as they investigate how to combat the situation after many clubs were implicitly involved in overstating the percentage of players’ income that came from image rights. UEFA is also monitoring the situation carefully as part of its financial fair play drive.According to the Sunday Times, players rushed to set up image rights companies in the wake of the introduction of the 50p tax rate on earnings over £150,000 by Chancellor Alistair Darling 18 months ago. Arsenal’s Theo Walcott has ‘TJW Promotions’ while David James has ‘Toocoo’. A Revenue and Customs spokesman said: "HMRC are well aware of attempts to use image rights as well as other schemes to avoid the 50p rate of tax. The taxation of image rights is a complex area, where the tax treatment will very much depend on the facts of the particular case.”Manchester debt firm is liquidated owing creditors over £2.2m
Wednesday 11th August 2010
Bankrupt football legend probed by police over loan fraud
Monday 2nd August 2010
Mortgage broker ordered to repay £1.5m of client money used to pay off debts
Wednesday 14th July 2010
Barclays lifts lid on banking write-offs
Wednesday 20th February 2008
Send To Friend Print
RSS Feed News Archive If you have any queries about this news story or our news section, please contact us
Posted in: 
0 comments:
Post a Comment