HMRC have stepped up their investigations into the tax affairs of the football industry, tripling investigations of individual professional footballers and more than doubling its tax takings from investigations in 2019/2020.

Figures show 246 investigations into individual footballers were underway by March 2020, up from 87 the year before. There were 25 investigations into clubs and 55 involving football agents. 

A Freedom of Information Act application by accountants UHC Hacker Young, found HMRC have particular concerns over Image-rights deals. These are the additional payments football players receive for the use of their image by the football clubs for endorsements and advertising. 

Image rights payments are frequently passed through a footballer's personal company and taxed at Corporation Tax rates of 19% rather than being taxed under PAYE, with higher rate Income Tax at 45%. In particular, HMRC believes that lesser-known players receive a meaningful percentage of their income from these sorts of payment structures which may be found to be tax avoidance. 

Last year in Hull City AFC (Tigers) Limited v HMRC [2019] TC7074, the First Tier Tribunal decided that payments made to Geovanni Gomez’s offshore company under an image rights contract were employment income and not a consideration for the licensing the footballer’s image rights.

HMRC were also targetting football agents, believing that the sizeable fees for the transfer of players were also open to abuse. The number of investigations of agents doubled from 23 in 2018/19 to 55 in 2019/20. 

HMRC more than doubled its tax take from investigations into the football sector in 2019/2020, collecting £73m up from £35m the year before.


Image rights and tax
Image rights are not protected under UK law as they are in other jurisdictions. It has been established by the courts that image rights may exist.

Golden handshakes, signing on fees and unusual payments
An employee may receive a payment or fee that is not described or treated as remuneration when joining a new employer, or during the course of their employment.