The Premier League is aware that a number of media outlets are asking its clubs about tax matters. The below seeks to clarify tax policies as they stand with HMRC.
The League takes its tax responsibilities seriously and has rules in place requiring all clubs to submit quarterly reports confirming they are up to date with PAYE and National Insurance contributions.
The tax paid by Premier League players is both substantial and transparent. The latest available figures from the 2014/15 season, highlighted in a report conducted by EY (Ernst & Young), show that £891million was paid by players as part of an overall contribution to the Exchequer from the Premier League’s economic activities of £2.4bn per year.
See: EY report on Premier League impact
Image-rights contracts and payments to intermediaries are matters for individual clubs and players based on commercial substance in each case.
The League has in the past facilitated discussions on these matters with HMRC which have led to guiding principles being established that are underpinned by case law.
In the area of image-rights contracts, which are recognised and established sources of income, the guiding principles established with HMRC on the proportion of income which can be attributed to them are as follows:
- Clubs can only spend up to 15% of their commercial revenue on image-rights contracts
- Clubs can pay players a base level of 20% of their total remuneration in image rights, depending on adhering to certain criteria.
In terms of payments to intermediaries operating for both player and club in the same player transfer, the guiding principles established with HMRC are as follows:
- Evenly splitting the payment to an intermediary (the club pays 50%, the player pays 50%).
- The work an intermediary does for a club is a service for which VAT can be reclaimed under the general principles.
Any image-rights contracts or payments to intermediaries which diverge from these guiding principles are for clubs and players to justify to HMRC.