HMRC is probing at least two Manchester United players over potential image rights tax dodging, as reported by the Daily Mail.
The tax avoidance allegedly occurred under an agreement in the 2014-2015 season, where clubs would pay up to a fifth of their footballers’ total pay packages to ‘image rights’ companies rather than as part of their salary, thereby allowing the footballers to avoid income tax and allowing clubs to avoid National Insurance contributions.
Although “a household name on international duty over the past few days” confirmed to the Mail that HMRC was investigating him, there is no evidence to suggest the players knowingly dodged tax.
A spokesperson for HMRC told the Mail: “HMRC carefully scrutinises the arrangements between football clubs and their employees in respect of any image right payment to make sure the right tax is paid.”
“We rigorously enforce the rules and tackle firmly anybody who games the system. Since 2014-15 we have delivered £269million in extra tax from tackling rule-breakers in the football industry generally.”
Tax dodging allegations have continued to plague the football industry this year, with high-profile cases such as the Rangers Supreme Court case and Cristiano Ronaldo’s alleged €14.8m tax fraud dominating headlines.
Earlier this summer the Supreme Court ruled in favour of HMRC over the Rangers Football Club in a precedent-setting case relating to an employee benefit trust scheme that facilitated tax dodging.
HMRC reiterated their commitment to cracking down on tax avoidance in the industry to the paper: “We are currently making enquiries into the tax affairs of 67 footballers, 39 football clubs and 13 agents concerning a range of issues, including image rights abuse and are looking into more than 100 footballers in relation to the use of tax avoidance schemes.”
As part of these efforts, HMRC also undertook a number of high-profile dawn raids on football clubs this year, specifically Newcastle United and West Ham United over suspected £5m income tax and national insurance fraud, which led to several arrests. At the time HMRC said in a statement: “This criminal investigation sends a clear message that, whoever you are, if you commit tax fraud you can expect to face the consequences.”
The Revenue also recently revealed that they won 22 out of 26 tax avoidance cases in 2016-17, proving themselves to be a formidable force to challenge.
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