TaxAdministrationFootballers’ trick will soon merit a red card

Footballers' trick will soon merit a red card

The behaviour of top flight footballers often makes the red tops. If current conversation in the tax profession is anything to go by it will be their tax returns next in the headlines

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.

comment@accountancyage.com

Related Articles

LITRG urges government to consider tax changes in disability work plan

Administration LITRG urges government to consider tax changes in disability work plan

3d Lucy Skoulding, Reporter
HMRC issues updated Trusts Registration Service guidance

Administration HMRC issues updated Trusts Registration Service guidance

3w Emma Smith, Managing Editor
‘Significant recovery’ for HMRC customer service, claims boss Thompson

Administration ‘Significant recovery’ for HMRC customer service, claims boss Thompson

2y Fraser Simpson, Reporter
HRMC loses £653,000 tax battle following administration error

Administration HRMC loses £653,000 tax battle following administration error

2y Fraser Simpson, Reporter
Bid to cut VAT bill on wedding venue hire rejected by Tribunal

Administration Bid to cut VAT bill on wedding venue hire rejected by Tribunal

2y Richard Crump, Writer
HMRC high-value tax cases drop 15%

Accounting Firms HMRC high-value tax cases drop 15%

2y Fraser Simpson, Reporter
Government deliberates secondary adjustment to transfer pricing rules

Administration Government deliberates secondary adjustment to transfer pricing rules

2y Fraser Simpson, Reporter
HMRC taskforces raise £540m since launch

Administration HMRC taskforces raise £540m since launch

2y Richard Crump, Writer