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Tax Avoidance: FA to assist HMRC’s crackdown on agent fees

The Football Association has agreed to help HM Revenue and Customs in their scrutiny of every payment made to football agents over the last year which is said to total £80m…

Added 31 October 2011

In a bid to crackdown on tax avoidance schemes in the Premier League and Football League, HMRC have now joined forces with the Football Association (FA) to scrutinise payments received by football agents over the last year.

Analysts Deloitte have estimated that football agent’s earned a whopping £80m last year from players in both major football leagues.

On behalf of HMRC the FA have sent out letters to all licensed football agents notifying them that they will be giving HMRC details of all payments that have been made to agents in the past year.

A spokesman for the FA, said:

“We are more than happy to assist HMRC in these matters.

“Transparency is uppermost in our thoughts and this will bring further clarity to the game.”

Details of payments made in 2010-2011, up to 31 March, to football agents through Wembley’s clearing house account will be disclosed by the FA to HMRC by 31 October 2011.

The Daily Telegraph has seen a copy of the letters in question that were sent out to football agents, which state:

“The FA would like to make you aware that HMRC have required us to submit…all payments made to FA Licensed Agents in respect of Agency Activity on behalf of football clubs, paid via The FA Clearing House for the years ending 31st March 2010 and 31st March 2011.

“In accordance with its legal obligations, the FA will be complying with this notice. The details submitted to HMRC will comprise: The name and address of the agent to whom the earnings passed – the amount of money that was passed to the agent – the name and address of the original payer of the money – the name of the player to whom the payment relates – the date on which the payment was made.”

High profile football agents that may have received the FA’s letter could include Kia Joorabchian and Willie McKay, who recently came under fire by HMRC for his involvement acting as agent for Joey Barton’s transfer to Queens Park Rangers from Newcastle Utd.

Mckay confirmed he received a fee from Queens Park Rangers, although it is unknown if the payment relates to Barton’s transfer fee:

“Every deal I have done for the last eight years has been scrutinised and everything I do is above board and in line with the rule,” Mckay added.

HMRC are to audit every payment made to agents in an attempt to tackle tax avoidance loopholes thought to be used by premiership footballers and agents.

One legitimate tax avoidance loophole that the Revenue is keen to close is the avoidance of benefit-in-kind tax by footballers. This is done by the football agent representing the buying club, instead of the player, so money is paid for services to the football club and not liable for the tax.

A spokesman for HMRC, said:

“HMRC are aware of a potential tax issue concerning the payment of agent fees and are taking steps to ensure the tax rules are respected.”

The Revenue believes that football players are costing the public purse millions of pounds a year through such tax avoidance schemes.

Kevin Kinsella Jnr, at KinsellaTax, says:

“It does look as though HMRC are going for football agents who are generally regarded as high earners. If there are problems I do hope that the agents actually instruct specialists who deal with these sort of cases on a day to day basis rather than leave the matters in the hands of their solicitors or accountants, who are no doubt brilliant at what they do, but these tax enquiries do warrant specialist tax advisors who only do that on a day to day basis.

“I like to compare it with the building industry as you would not ask a brick layer to do plumbing or electrical work,” he adds.

Football agents are one of many high-net worth individuals that will be targeted by HMRC’s tightening the net of tax avoidance schemes used by individuals and businesses.

If you have entered into atax avoidance schemeor received advice to take advantage of atax avoidance scheme, you should ring one of ourCode of Practice 8tax investigationexperts NOW.

KinsellaTax staff consists of ex-HM Inspector of Taxes and ex-HM Custom and Excise Officers, fully experienced inHMRC investigations.

Call us NOW on 0800 471 4546 to speak to one of our dedicated tax avoidance investigation experts or click here to fill in an online tax enquiry form.

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