Footballers' trick will soon merit a red card

Faced with a 50% tax band for those earning more than £150,000 there is much speculation that footballers, many of whom are on salaries way above that threshold, are to engage in a little tax management ­ namely taking their pay as an interest free loan that would not attract tax.

Hackles everywhere should be standing to attention right now at the thought of this. Pampered and overpaid footballers sidestepping a tax levy cannot be right.

That’s a moral argument as well as a technical one. But one key issue is whether it is a disclosable tax avoidance scheme under the taxman’s regime of reporting?

The argument could rest on whether the scheme is marketed widely, or is simply provided as a one-off service following a conversation initiated by the client.

That’s a strange distinction. The substance of the scheme would not change, merely the way it was managed or sold. Intuitively that doesn’t sound right. It’s difficult to see how in one way it would be acceptable and in other it would not. Granted, wide-spread use would make it a problem of a different scale, but there would be no substantive difference. It’s hard to see how the general public could see the validity of distinctions made in that way.

Footballers would, of course, only be the tip of the iceberg. Even now, it’s not impossible to imagine HMRC putting its staff on alert for the details as they come through in tax returns. Other well-heeled individuals would come under the spotlight. Even if it gets off the ground don’t expect the interest-free loan trick to be tolerated for long.

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