The Press Complaints Commission (PCC) has rejected Wayne Rooney’s complaint that the Sunday Times breached the Editor’s Code of Practice on a story about the rate of tax he and other Premier League footballers have paid on club loans.
The Sunday Time’s front-page head-liner said that “dozens of top footballers” had been “avoiding millions of pounds in tax” through “complex Tax Avoidance schemes”.
The Sunday Times claimed that Rooney had avoided £600,000 in taxes by receiving £1.6m from Manchester united in the form of loans, rather than taxable income.
Rooney filed a complaint to the PCC under allegations that the newspaper’s headline – ‘Top footballers dodge millions in income tax: Rooney pays 2 per cent on some earning’ – was ‘misleading’ and ‘inaccurate’, as he was in fact liable to pay 28% Corporation Tax on all loans received from Manchester United.
Rooney also added how the Sunday Times had failed to mention he had paid the loan back within the year.
The complaint came under clause 1 and 2 of the PCC, which state that:
Current tax laws entitle football players to receive a loan from their club through a limited company – this means they pay just 28% in corporation taxes, opposed to the 50% rate that applies to UK income tax.
The footballer can then receive this loan as a ‘benefit in kind’ from the limited company, paying just 2% tax.
The loan must then be paid back to the club within 9 months after the end of the year it was received. Otherwise they will be liable to pay an additional 25% in corporation tax on the outstanding sum borrowed.
The Sunday Times defended themselves by saying that the headline had not been ‘misleading’ and that Rooney had in fact structured his loans so that he was only liable to pay 2% tax, even though completely legal.
The Press Complaints Commission (PCC) agreed that the chosen headline needed more explanation and that the 2% tax rate ‘could not explain the complexity’ of Rooney’s ‘tax affairs’. But that the content of the article cleared up confusion from its title.
PPC judgement of Rooney’s complaint, states:
“The article made clear that not only was the arrangement legal, but that the money – which had already been subject to corporation tax – was a director’s loan in respect of which tax was paid.
“They also [The Sunday Times] made clear that it was likely that the loan would have to be repaid. In any case, the newspaper offered to make clear that Mr Rooney paid all his taxes at the legally required rate, which the Commission considered to be a ‘sensible and proportionate’ response. As a result, clause 2 (opportunity to reply) of the Code was not relevant.”
The Sunday Times has agreed to print a re-statement over Rooney’s tax affairs to say they are entirely legal. But the PCC have told the newspaper not to retract their 2% tax rate claim; rejecting Rooney’s claims it is ‘misleading’.
Kevin Kinsella, of KinsellaTax, said:
“Although Tax Avoidance is the legal structuring of tax affairs, if HM Revenue and Customs come across Tax Avoidance Schemes they will work at shutting them down and re-claiming any tax lost to them.
“Code of Practice 8 investigations look into accusations of Tax Avoidance with the view to claw back any tax lost to the Exchequer. If you have entered into a Tax Avoidance scheme or received advice to take advantage of a Tax Avoidance Scheme, you should seek help immediately.”
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