The special civil investigations unit of HM Revenue and Customs is investigating image rights payments to top players. At one time the amount of players’ income designated as image rights was 10 to 20 per cent, but now it can be as much as a third. A court heard recently that Wayne Rooney was paid as much as £760,000 a year by Manchester United for his image rights.
The special civil investigations unit of HM Revenue and Customs is investigating image rights payments to top players. At one time the amount of players’ income designated as image rights was 10 to 20 per cent, but now it can be as much as a third. A court heard recently that Wayne Rooney was paid as much as £760,000 a year by Manchester United for his image rights.
Clubs started paying players part of their earnings as image rights during the 1990s. They supposedly relate to the player’s off the pitch earnings such as replica shirt sales, endorsements and promotional work. They are usually played to service companies owned by players. Because the image rights payments are made to a company rather than an individual, they are subject to corporation tax levied at 21 per cent or 28 per cent, rather than National Insurance and income tax, currently paid at up to 40 per cent but with a new top rate of 50 per cent from April.
If the player is from overseas, his service company is likely to be based offshore, allowing him to avoid even more UK tax. Read more here.