Premier League tax to top £1bn

THE FOOTBALL PREMIER LEAGUE will contribute more than £1bn in tax for the first time in the 2011/12 season, new analysis has shown.

Football clubs in the top flight contributed around £725m in 2009/10, including £458m from income tax on salaries and £188m in National Insurance contributions. Saffery Champness said that an increase in television revenues of almost 30% in 2010/11 will contribute to increased player wages. Coupled with the introduction of the 50% top rate of tax and a 20% VAT rate on ticket sales, this will lead to an increase in tax revenues in 2010/11.

Pete Hackleton, senior tax manager at Saffery Champness, said that further high-profile transfer deals this summer will mean that "the contribution of Premier League football to the Exchequer could be in the region of £1bn for the first time in the 2011-12 season".

"It is unlikely that the public have any sympathy for the amounts of tax footballers pay, but the negative focus on Image Rights companies used to drive the commercial value of a player through a limited liability vehicle, securing additional endorsement opportunities for them during short careers, and structured (as in any business) in such a way as to minimise their tax liabilities is misleading," he added.

"Tax structuring is relevant for any highly paid individual and if carried out within the existing tax legislation is perfectly legal. For all the criticism of ever increasing footballer's salaries, the unsung contribution that the industry is making to the UK economy is substantial."