Last season we firstly revealed the illegal practice in place in many Premier League clubs by avoid tax payments on image rights. Now top footballers in England could lose a combined £100 million to taxes if a loophole involving their image rights is closed says West Ham co-owner David Sullivan.
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David Sullivan: Grappling with West Ham's finances
HM Revenue & Customs suspects the image rights deals are being used by clubs to top up payments to players at the Treasury's expense, because the image rights payments are taxed at a lower rate than normal wage payments.
The Revenue's special civil investigations unit has a team of 20 tax inspectors sifting through players' image rights deals, and it has written to all the top players who receive part of their income through image rights.
Clubs contest that the image rights deals are legitimate licensing payments, which are taxed at 21% or 28%, but if the Revenue determines the payments should be counted as wages, they would be levied at 40%, with a new 50% top rate from April.
Premier League clubs, led by Premier League finance director Javed Khan, have attempted to strike a collective deal with the Revenue. The clubs face a backlash and possible legal action from players who would be receiving decreased net payments compared to what was promised in their contracts.
Sullivan said the Hammers are trying to resolve issues between their players and the Revenue as quickly as possible, and that the club will withhold the image rights payments until an agreement is reached.
More at
Premier League players could lose £100m to taxman - Barclays Premier League - ESPN Soccernet
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