[ad_1]
Premier League clubs ‘may have dodged paying £250m in tax because of the way payments with agents are structured’, with HMRC and the government urged to challenge how agents are representing both sides
- Dual representation has reportedly become a standard practice in the industry
- It sees agents paid for representing both clubs and players in deals
- Payments to agents are made to avoid tax when the sum is paid by the club
Premier League clubs may have avoided paying £250million in tax over a three-year period by using dual representation contracts to pay agents, according to a report.
Agents and clubs were estimated to have saved £81m in 2019, £91m in 2020 and £81m in 2021 through the practice, a BBC Newsnight report said.
According to Tax Policy Associates, who estimated the figures, dual representation allows clubs and agents to avoid employment taxes and VAT on the large commissions paid to football agents in transfers and contracts.
It sees an agent receive payments for acting for both the club and player in the deal, rather than solely from the player they represent.
The fees paid to agents reportedly escape income tax, national insurance and VAT when the sum is paid by the club.
A report has claimed Premier League clubs may have avoided paying £250million in tax
Tax Policy Associates say this means the tax received by HMRC drops from 60 per cent when the agent’s fee is paid solely by the player, to 30 per cent when split between the player and club using dual representation.
The practice has become standard in the sport, it is claimed, with an estimate that HMRC may have missed out on £470m since 2015.
Manchester City, Manchester United and Liverpool were reported to have been the biggest beneficiaries from the use of dual representation in 2021, with the clubs estimated to have saved £10.9m, £10m and £8.1m, respectively.
Tax Policy Associates’ estimates are based on the assumption that players and clubs split the agent fee evenly, which is said to be the industry standard.
HMRC, who are reportedly investigating ‘a number of clubs’, have been urged to ‘aggressively challenge all the clubs which have historically used joint representation contracts’.
Tax Policy Associates have also called on the Government to enact specific income tax, national insurance and VAT anti-avoidance rules.
The BBC and Tax Policy Associates said that individual Premier League clubs each declined to comment on the analysis.
Tax Policy Associates claim HMRC may have missed out on £470million since 2015
‘We believe that the overall figure suggested here is based on assumptions that do not recognise the individual circumstances of each transaction,’ a Premier League spokesperson said.
‘During the 2019/2020 season Premier League football contributed £7.6bn to the UK economy.
‘In the same season the Premier League and its clubs generated a total tax contribution of £3.6bn to the UK Exchequer, £1.4bn of which was accounted for by Premier League players.’
The Association of Football Agents claimed the findings showed a ‘fundamental misunderstanding of how the football transfer market works’.
[ad_2]
Source link
Denial of responsibility! galaxyconcerns is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.
