Monday, January 17, 2011

BPL stars involved in tax dodge?

Complex tax avoidance schemes are allowing Barclays Premier League footballers to avoid paying the taxman.

According to reports in the Daily Mail, Premier League stars like Manchester United's Wayne Rooney, Arsenal's Theo Walcott, Manchester City's Gareth Barry and several others are avoiding millions of pounds in taxes, paying as little as two per cent on their earnings.
What these highly-paid stars have reportedly done is set up shell companies, subject to a lower tax rate, to collect their "image rights" payments from their clubs.
However, the HM Revenue and Customs (HMRC) have discovered this loophole, and is demanding that their clubs pay £100 million to cover the difference that their players have avoided in taxes.
According to reports, Red Devil Rooney has dodged almost £600,000 the past two years, while Barry has also profited to the tune of £135,000, as opposed to if he had paid his 40 per cent of due taxes.
Other big-name players involved include Chelsea wing-back Ashley Cole, Manchester United's Rio Ferdinand and Michael Owen.
According to reports, the players have two contracts- one as a player, and the other for "image rights", which are payments for merchandising and shirt sales.
These royalties are paid to their shell companies, which are only liable for 28 per cent corporation tax as opposed to a 50 per cent income tax, and the players then take out loans from their own companies, where they only pay two per cent tax on the sum as it is regarded as a benefit of their ownership.

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