PracticeConsultingSoccer testimonials may lose tax status

Soccer testimonials may lose tax status

Tax-free windfalls from footballers' testimonials may be scrapped after the sports minister today asked the Treasury to review the practice.

The proposal by Richard Caborn to red card footballers one-off paydays comes just days before the new football season kicks off on Saturday.

Caborn wants the Treasury to look at the practice of testimonials to see whether they should remain tax free.

One option would be to set an earnings ceiling and make any players paid more than a certain limit pay tax on any income from such occasions.

Testimonials were originally introduced to reward injured or loyal players after 10 years’ service. But that was in the past when footballers’ earnings were only a fraction of today’s towering wages and were even restricted by a maximum wage law.

English champions Manchester United are to play Scots giants Glasgow Celtic in a testimonial for their winger Ryan Giggs tomorrow, with the sell-out Old Trafford clash expected to add at least £1m to the Welsh international’s tax free earnings from testimonial events this year – taking the total to almost £2m.

Giggs also recently scored a new contract with the club, which will see him net £50,000 a week, equivalent to more than £2.5m a year.

But the Professional Footballers’ Association has defended benefit matches.

In a BBC report, however, PFA chief executive Gordon Taylor, admitted: ‘Whether it’s justified financially is open to question.’

Guidance states such matches are technically subject to tax, but also indicates ways in which the tax bill can be avoided. To qualify as a tax-free testimonial, the match must be organised by a committee or third party.

The Revenue cannot claim any money raised by a testimonial as the fans are not forced to watch so the money is a gesture of goodwill. But if it was a condition of a footballer’s employment that they can have a benefit after ten years it would be taxable.

Related Articles

5 tips for SMEs to protect cash flow

Accounting Software 5 tips for SMEs to protect cash flow

5m Alia Shoaib, Reporter
Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

Consulting Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

11m Stephanie Wix, Writer
Managing partner Q&A - the year ahead: Richard Toone, CVR Global

Accounting Firms Managing partner Q&A - the year ahead: Richard Toone, CVR Global

12m Kevin Reed, Writer
Deloitte 'self-imposes exile' on government contracts to defuse PM row

Accounting Firms Deloitte 'self-imposes exile' on government contracts to defuse PM row

12m Kevin Reed, Writer
Managing partner Q&A - the year ahead: Julie Adams, Menzies

Accounting Firms Managing partner Q&A - the year ahead: Julie Adams, Menzies

12m Kevin Reed, Writer
Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

Business Regulation Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

1y Kevin Reed, Writer
Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

Audit Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

1y Kevin Reed, Writer
New head of equity capital markets for KPMG

Accounting Firms New head of equity capital markets for KPMG

1y Stephanie Wix, Writer