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Manchester United face row with HMRC over image-rights and tax

By December 12, 2014June 13th, 2017No Comments

After all the problems with the Glaziers over the amounting debt and goodness knows what else, Manchester United now face a row with HMRC.

Apparently in the £500 million bond prospectus they have admitted that the taxman is breathing down their neck.

The club says:-

“There is a possibility that this matter may lead to litigation.

HMRC’s position is that payments in relation to image rights may be a form of remuneration and, as such, should be taxed as income. On 18th September 2009, we submitted a letter to HMRC, setting out our view that these payments are not taxable as income.”

Well, that may be the view of Manchester United but of course it is not the view of Fifa’s general secretary, Jérôme Valcke.

It is thought that there is a document that will form the prosecution case in a French enquiry into alleged football corruption that comes to the High Court in Paris in March.

One of the witnesses interviewed was M Valcke. He explained that image rights came from the 1998 World Cup with clubs using them “in order to finance an element of salaries or transfer fees while keeping them out of the hands of the taxman.”

Valcke added that by doing so clubs could also grant the responsibility for these payments to a third-party, therefore keeping them off their books.

If this is indeed what has happened at Old Trafford, it would lead us to believe that the club’s true wages-to-turnover ratio is much higher than the 44% stated.