TaxPersonal TaxRevenue to sniff over Beckham’s tax bender

Revenue to sniff over Beckham's tax bender

The Inland Revenue could be set to crawl over the tax affairs of the UK's top football players if David Beckham succeeds in winning a special 'image' pay deal.

According to the Financial Times, Beckham has been negotiating a new deal with Manchester United, which would allow him to set up a separate ‘image rights’ contract to run alongside his salary.

If he is successful, the extra money could be paid into a company established to cash in on his image, and in the process reduce his tax bill.

Other sports stars could follow suit, setting up ‘personal service companies’ – now subject to the so-called IR35 tax regime – to avoid national insurance contributions if payments are made into separate companies, set up by the players, rather than receive a salary directly.

But a Beckham-style deal would establish a separate income from a regular employer, leading to fears that players could disguise a portion of their salary as image payments, and avoid NIC.

In the past, such an option might not have appeared attractive, but with the additional 1% payable on all income announced in the Budget, the move has now become a serious option.

The Inland Revenue declined to comment on the FT story.

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