24 UK football clubs have been sent a questionnaire entitled ‘The Football Clubs Employment Issue Questionnaire’ by HMRC which asks how clubs account for luxury gifts and benefits that football players’, WAGS and their families receive.
After recent announcements that the Revenue is to crack down on tax avoidance schemes adopted by football players, their agents and clubs, HM Revenue and Customs are investigating the perks that top UK footballers receive and have already questioned finance directors at some of the UK’s richest football clubs.
HMRC’s ‘High Net Worth Unit’ that are heading up the investigation are looking to find details of luxury gifts football players receive including lavish holidays abroad and accommodation where they can want for nothing.
HMRC’s questionnaire is thought to have been sent to 24 of the country’s top football clubs already, although HMRC investigators have not exposed the names of clubs which have been targeted.
A spokesman from HMRC, said:
“We are not talking about a few low cost gifts. These people are multi-millionaires. We wouldn’t be doing this if we didn’t think it was going to bring in a lot of money.“It doesn’t matter where you come from. If you work in the UK you are liable to pay tax on your UK earnings. Employers are required to deduct tax from your earnings.”
Another area that HMRC are going to check that tax has been declared correctly is for football player appearances on the TV stations of their football club. TV channels that may attract HMRC’s attention include Manchester United TV (MUTV), Chelsea TV and Liverpool Football Club TV (LFC TV), to name a few.
“If HMRC feel there are discrepancies or there are answers they are not happy with it could trigger an investigation”, the HMRC spokesman added.
In response to HMRC’s investigation into benefits in kind and the non-disclosure of benefits, deputy chief executive of the Professional Footballers Association (PFA), Bobby Barnes, said:
“Throughout the Premier League I really don’t think that there are many owners who are putting yachts and holidays in disposal of players.
“Many Premier League players have a lot of perfectly sensible holiday accommodation of their own. Most players have accountants and specialist financial people who help players file their tax returns and can advise them on benefits.”
Benefits in kind should apply to anything that is given to an employee by their employer other than their salary. For example a company car, childcare or health insurance would count as an employee expense or benefit.
Benefits in kind should be checked with HMRC to see whether they are liable for tax or National Insurance Contributions (NIC).
The Mail Online reported on 8 January 2012 that HMRC’s ‘Football Clubs Employment Issue Questionnaire’ contains 16 pages and 181 questions in regards to payments made to players as well as football clubs finances.
Some of the questions that The Mail Online report to be stated on the said questionnaire include:
“5.9 Are any payments made out of trusts on the recommendation of the club to players or family members as earnings, loans, or in some other form? If so please provide full details.
5.20 How are “Man of the Match” or “Players of the Season” and other such rewards treated for income tax and NIC?
14.3 Is there an annual function for staff, such as a Christmas party? If so please provide details.”
Football agents will also come under scrutiny in HMRC’s new investigation for the declaration of, and the hand they play in sponsorships deals, when players receive free luxury merchandise and transport vehicles from the brand they are representing.
A source at HMRC said:
“We believe there is a risk of tax being lost as a result of either poor tax administration or abuse of the rules. We think the clubs are keen to help us resolve these concerns.”
Kevin Kinsella Jnr, of KinsellaTax, said:
“Sooner or later HMRC will be investigating everyone; my only question is where the inspectors to handle these investigations are?
“Are we going to have more inexperienced ‘lower-level inspectors’ handling enquiries, which will be much more expensive for clients dealing with the demands of these ‘inspectors’ who are learning on the job at the expense of the clients?
“Every tax advisor has come across these inspectors.”
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