Tax & Footballers

[Kess]

Today's Daily Mail has an article about the latest tax schemes enjoyed by footballers: Top footballers like Wayne Rooney dodge millions in tax by cashing in on loophole | Mail Online

I know DM articles must be treated with a pinch of salt, but the following line caught my eye:

And players can take out loans from their companies where they only pay two per cent tax on the sum because it is regarded as a benefit in kind.

I assume they're talking about a director's loan, which I believe is limited to £5000 (i.e. hardly worth a footballer bothering with), but why should a BIK only be taxed at 2%? Has the DM made an error or is this really possible?

[Freamon]

Today's Daily Mail has an article about the latest tax schemes enjoyed by footballers: Top footballers like Wayne Rooney dodge millions in tax by cashing in on loophole | Mail Online

I know DM articles must be treated with a pinch of salt, but the following line caught my eye:



I assume they're talking about a director's loan, which I believe is limited to £5000 (i.e. hardly worth a footballer bothering with), but why should a BIK only be taxed at 2%? Has the DM made an error or is this really possible?

I assume the bulk of the "image rights" money comes to the players in the form of dividends from their promotion company. On principle this sounds dodgy, as if the promo company were to substitute the services of another footballer the customer (the club) wouldn't be happy. In practice, HMRC will probably just further complicate their existing set of rules about disguised employees just to capture footballers in this particular scenario, then their accountants will just find another way around it.

[AtW]

Well, if they pay dividends then their company surely should pay Corp Tax - 28% currently if they get over £1 mln, plus they pay income tax 32.5% (50% rate taxpayer).

[MarillionFan]

Today's Daily Mail has an article about the latest tax schemes enjoyed by footballers: Top footballers like Wayne Rooney dodge millions in tax by cashing in on loophole | Mail Online

I know DM articles must be treated with a pinch of salt, but the following line caught my eye:



I assume they're talking about a director's loan, which I believe is limited to £5000 (i.e. hardly worth a footballer bothering with), but why should a BIK only be taxed at 2%? Has the DM made an error or is this really possible?

I am correct in saying that the loan paid at 2% is a loan. They still have to pay it back. So I don't see what the benefit is and why the DM raised it?

[AtW]

So I don't see what the benefit is and why the DM raised it?

Photo of Rooney sells more papers.

HTH

[MarillionFan]

Photo of Rooney sells more papers.

HTH

Is everyone getting thicker on here.

What is the benefit of taking 2% loans. You still have to pay loans back, so it's not really (2%) tax is it!

[AtW]

What is the benefit of taking 2% loans.

Maybe he is waiting for 50% income tax to be dropped soon, but if it takes more than 5 years wait then he might not get such a good deal out of this scheme...

[Kess]

I am correct in saying that the loan paid at 2% is a loan. They still have to pay it back. So I don't see what the benefit is and why the DM raised it?

I think you're right. A director's loan should be repaid during the company's tax year, otherwise it gets taxed as a BIK. The 2% figure in the DM article seems to be completely spurious.

[MarillionFan]

Maybe he is waiting for 50% income tax to be dropped soon, but if it takes more than 5 years wait then he might not get such a good deal out of this scheme...

The whole article is stuff and nonsense. They are operating in no different way to us for image rights. A photo of Sasguru in a gingham dress is worth almost the same as David Beckham in bed with three hookers. :straight faced smiley:

[Kess]

I just came across a good article debunking the DM article and clarifying things: Tax tease: Inaccurate Footie Tax story resurrected as ‘news’ | FavStocks