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LawThe Sports LawyerThe Sports Lawyer: ‘For obvious reasons, taxation of the rich will affect football’

The Sports Lawyer: ‘For obvious reasons, taxation of the rich will affect football’



THE SPORTS LAWYER is actually a posse of Britain’s brightest lawyers, from the Sport & Media team at the UK law firm, Thomas Eggar, who will be contributing features, analysis and insight on a regular basis on the key sports law issues of the day. In TSL’s latest column, Emily Osborne  discusses the HMRC’s focus on high earners in football.



By Emily Osborne

27 September 2011

Tax of the wealthy has been high on the agenda, notably last week as the Liberal Democrats held their annual conference. Amongst the ongoing debate on the retention of the 50 per cent rate and the recruitment of 2,000 additional tax inspectors, there was an announcement by Danny Alexander, chief secretary to the Treasury, that a team of 100 tax inspectors is being created to focus solely on the 350,000UKresidents whose personal wealth exceeds £2.5m.

For obvious reasons, this focus is likely to home in on the football industry. In addition, HMRC are currently reviewing transfer agreements where the buying club or a third party pays the player’s agents’ fees. Such payments may count as employment income of the player, and HMRC are checking whether any such payments have been correctly accounted for.

It is also worth bearing in mind that it is a breach of the FA Agent’s Regulations 2009 for the buying Club to simply pay the fees of the player’s agent. Where an agent acts for a player, the Club can make a payment to the agent but it must be a genuine salary deduction so that the sums are deducted and paid in discharge of the Player’s obligation to the agent. Alternatively, the Player may request, that the Club discharges the Player’s liability towards his Authorised Agent, as a taxable benefit, provided always that:

i. The Player and the Club fulfil the relevant requirements of tax law in relation to such payment(s); and

ii. The payments are made through The Association in accordance with  the Regulations


Whilst it is common for such payments to be negotiated as part of transfer talks, the renewed focus by HMRC on such agreements underlines the importance of obtaining tax advice during negotiations to ensure players meet their tax obligations. With their all important images to protect (which is another subject HMRC are very interested in), players cannot afford to be on the receiving end of an HMRC enquiry.

Emily Osborne is a Senior Associate in the Sport and Media Group at Thomas Eggar.

Sports shorts (by Andrew Nixon)

Samoan player apologises for twitter comments

Fuimaono-Sapolu has apologised for comments he made this week over twitter in relation to the scheduling of the Rugby World Cup apparently favouring the tier one nations. His comments focused on the fact that Wales had seven days rest in advance of the Samoa/Wales match last weekend, whereas Samoa only had three.

The IRB has decided not to impose sanctions on the player. The words the player used in the tweet were inappropriate but the wider point about scheduling has some merit. The problem for the IRB (which must be commended for the improvement of the ‘minnow’ nations) is that it is beholden to broadcasting companies who pay considerable sums to ensure tier one nations play at certain times of the week. The governing body faces a difficult task balancing this with the rest periods needed in what is a highly combative sport. There is little doubt that, at the highest level, four days extra rest can provide a decisive advantage, and it is something the IRB needs to bear in mind for the credibility of its global showpiece.

Bin Hammam takes appeal to CAS

Following the FIFA Appeal Committee decision to turn down Mohamed Bin Hammam’s appeal against his life ban following the ‘cash for votes’ scandal, the former executive committee member has confirmed his intention to escalate his case to CAS.
Andrew Nixon is an Associate in the Sport and Media Group at Thomas Eggar.

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