December 27, 2016

Britain’s HMRC Chief calls for tax crackdown on Premier League Players

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HMRC says there are 43 players and 12 clubs subject to ongoing inquiries about image rights.

Britain’s top tax inspector this month called on chancellor Phillip Hammond to execute an immediate review of the tax rules for the mega-rich soccer stars who are avoiding paying their fair share by storing their money in image rights companies based in offshore tax havens.

Jon Thompson, chief executive of the United Kingdom’s HM Revenue and Customs, told members of parliament that offshore image rights payments are now “the most significant risk in football.”

Thompson, as well as Jennie Granger, the HMRC’s director of general enforcement, said they turned over evidence to parliament which implicates 43 players, eight agents and 12 clubs to ongoing inquiries in relation to payments for use of their image rights. The evidence was provided to parliament’s public accounts committee.

Earlier this month, a European consortium of media published leaked details of image rights arrangements for Manchester United manager Jose Mourinho. His agent responded timely by saying his client’s contract structure does not involve any tax evasion, and that Mourinho is “fully compliant with [his] tax obligations.”

Thompson told parliament that the HMRC already has a system in place for scrutinizing image rights payments made to players and coaches at the UK’s top flight clubs. He said “the vast majority” of clubs were very open with inspectors about how they calculated such payments – though a minority were less forthcoming.

Foreign-born players at the top clubs are best positioned to exploit the ample tax avoidance opportunities at their disposal through image rights payments. This is made possible because foreign-born players can qualify for the UK’s special “non-domicile” tax status — image rights income that channeled offshore by these individuals does not have to be reported to the HMRC.

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