Certainly Manchester United can afford to pay the tax so there is no problem there unlike Portsmouth who is deeply in trouble over debts due to HMRC and certainly Wayne Rooney can afford the tax.
I doubt very much he will have to as he will probably re-negotiate terms with United.
But there you are, more and more enquiries into the footballing fraternity and so it goes on…
Rooney’s contract with Manchester United is being investigated by HMRC after it was revealed in court that Rooney earns, per year, £1.52 million in image rights. HMRC claim this is a dodge engineered by football clubs.
Manchester United has already admitted that deals struck since 2005 are under investigation, meaning Rooney’s yearly salary of £6.2m will be one of those under scrutiny.
Rooney has more than £1.5m of his annual income paid to his image rights company and therefore taxed at 21 per cent, rather than the new higher rate of 50.
It is expected that HMRC will investigate all Premier League clubs and should they prevail, the clubs would have to increase wages to ensure the players receive the same net income. HM Revenue and Customs say clubs should have consulted with them before agreeing deals if there were any doubts over the tax status and it adds:-
‘The Government remains committed to ensuring everyone pays their fair share of tax and that the minority, who seek to not do so, should not succeed.’
HMRC claim that United alone owe £5.3m in back taxes and, more importantly, the club would have to find an extra £1m a year on Rooney’s current deal to ensure he takes home the same net pay, meaning a huge increase in the wage bill for the club seeing as though most of the top earners have an image rights deal.
The club are prepared to argue the case in courts, and insist the deals are legitimateas indeed they would. no doubt along the way there will be a compromise although instructions issued last year to staff was if the case was a winner then run it to the end, if there was doubt then drop it as soon as possible.
Given these directions, does HMRC think it is on to a winner?