Revenue to sniff over Beckham’s tax bender

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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