http://www.guardian.co.uk/sport/2009/sep/2...ess-premiership
HM REVENUE & CUSTOMS, concerned that sports clubs and players might be using image rights as a means of tax evasion, are investigating all 12
Guinness Premiership clubs. County cricket and rugby league are also under scrutiny and top football clubs could be the next target."It is clear that the Revenue sees this area as a potential tax loophole," said one rugby club official, who asked not to be named. "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."
Clubs commonly pay players a percentage of their salaries for use of image rights, often as much as a fifth. If individuals gain advertising contracts, make public appearances or generally enhance their public profile the clubs benefit, which is why they pay for the rights.
What concerns the Revenue is that money is apparently being paid to players who do not exploit their rights. Instead they put the money in offshore accounts, use it to pay agents' fees, and avoid tax on a large lump of their income. If HMRC decide tax is payable the sums could be backdated until 2006.
"I think there are instances where a player does not have any value to his image rights but still receives a payment," said Chris Caisley, a partner of the law firm Walker Morris and a former chairman of Bradford Bulls. "There are other examples where the image rights of a player are worth more to a club than his contribution on the field. I'd expect the Revenue to target those players whose image rights are not worth anything."
"What we need in this is clarification," said the Premier Rugby chief executive, Mark McCafferty. "It is about establishing ground rules, such the percentage of salary that can be paid into an image rights company."
The Professional Rugby Players' Association are not perturbed by the investigation. "The only issue we would have is if we felt unfair penalties were being imposed," said the chief executive, Damian Hopley. "
Rugby union is enjoying a high profile and young players emerging are finding themselves fêted in a way their predecessors were not. All we want from HMRC is clarity."[/b]
