Player image rights 'could be tax loophole'

A number of professional sports clubs are being investigated amid concerns that they may be using player image rights as a means of evading tax, it has been reported.

With a significant proportion of clubs now paying players a percentage of their salaries for image rights, HM Revenue and Customs inspectors are looking into the possibility that some professionals do not exploit their rights but instead put this money into offshore accounts.

According to the Observer, a number of rugby league, cricket and all 12 Guinness Premiership rugby union clubs are being subjected to fiscal investigations, with players facing the possibility of having to pay tax backdated until 2006.

One union club official told the newspaper: ’Some clubs face a potentially large bill if the Revenue finds instances of image rights being paid in lieu of salary, thus avoiding PAYE and National Insurance, but there is a feeling that it is using rugby and cricket to establish ground rules before moving on to the biggest football clubs where the potentially big money lies.’

Meanwhile, chancellor Alistair Darling is expected to announce a new range of measures aimed at clamping down on tax avoidance in this autumn’s pre-Budget report.
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