Salary Cap Investigations

[EdBirch]

It would be interesting to know how close clubs were to the cap. For some it might not be too difficult to come under the new cap if there were near that mark already.

 

[TRF_Olyy]

Sale players have agreed to take paycuts for the rest of their contracts because of Coronavirus/reduction in cap:
https://www.salesharks.com/2020/06/17/sale-sharks-club-statement-3/

 

[Vieux Talonneur]

Itoje has committed to Sarries. Bar Kruis I think that's all their English big guns retained.

 

[TRF_Olyy]

Sarries vs Stormers next year

Saracens retaining high ambitions for new challenge - Saracens

Saracens have announced their intention to play a high-profile game against the DHL Stormers with the two teams facing each other at Tottenham Hotspur Stadium in 2021.

www.saracens.com

 

[TRF_Olyy]

Fissler reckons another club is under investigation - someone looking to end the season in the top 4

Though it is Fissler so....

 

[LeinsterMan (NotTigsMan)]

I mean investigation doesn't mean they are actually cheating it.

 

[Which Tyler]

I mean investigation doesn't mean they are actually cheating it.

Good point, it seems that most years some club or other is over by "administrative error" amount.

Besides,wwhen Fiddler says something, I need an independent verification before I'll even treat it as a rumour - 2 of them if it's something contraversial

 

[Which Tyler]

HMRC probes English rugby's leading clubs over salary payments

The tax authority's investigation into the 12 Premiership clubs, plus Championship side Saracens, could lead to a raft of salary-cap breaches if image-rights deals for players are found to have been overvalued

inews.co.uk

The tax authority's investigation into the 12 Premiership clubs, plus Championship side Saracens, could lead to a raft of salary-cap breaches if image-rights deals for players are found to have been overvalued

England's elite rugby clubs are facing a wide-scale investigation by tax officials into how payments to players and agents are accounted for, i can reveal.

The move from Her Majesty's Revenue and Customs (HMRC) follows a similar probe into football, which resulted in players and agents being forced to hand over millions in unpaid taxes.

HMRC is understood to have launched the investigation into each of the 12 Premiership clubs, as well as Saracens, which remains a shareholder in the top-flight league despite playing in the Championship – the sports second-tier – this season.

The tax probe is believed to be focused on payments that players receive on top of their club salaries, as well as the role of agents in transfer and contract negotiations. It comes at a tough time for clubs who have lost tens of millions during the Covid-19 pandemic with no income from tickets sales or matchday spending by fans.

HMRC is looking to recover unpaid taxes on earnings players accrue via channels away from their playing contracts, including image-rights deals. Players are paid additional money on top of salary for the use of their image by their club, such as in advertising and endorsements.

This additional income is often paid to a company set up by the player and is only taxed at the 19 per cent corporation tax rate, rather than at the 45 per cent income tax rate top players pay on their general salaries.

 

[TRF_Olyy]

Bristol RN
and probably most clubs tbh, Newcastle the only safe one

 

[MikeTheNative]

Who foots the bill in the image cases though? Wouldn't it be the players having to pay back tax not the club?

 

[will311293]

Suddenly being broke as anything isn't looking too bad..... we don't have money to pay anyone anyway

 

[MikeTheNative]

Suddenly being broke as anything isn't looking too bad..... we don't have money to pay anyone anyway

In before the winding up order.....

 

[will311293]

In before the winding up order.....

Hey..... we will survive (Gloria Gaynor/Andy Goode) belting it out

 

[Reiser99]

Who foots the bill in the image cases though? Wouldn't it be the players having to pay back tax not the club?

I think the players would owe the tax and the clubs would be fined.

The main issue is that if the image deals are overvalued to avoid the higher tax in wages and HMRC deems that they have, then the implication is that those players should have been paid that money as part of their salary and this would mean clubs would have breached the cap if they had paid the players correctly.

 

[Which Tyler]

I think the players would owe the tax and the clubs would be fined.

The main issue is that if the image deals are overvalued to avoid the higher tax in wages and HMRC deems that they have, then the implication is that those players should have been paid that money as part of their salary and this would mean clubs would have breached the cap if they had paid the players correctly.

Only by the tax amount, surely - I'm sure that last time we delved into it, image rights etc were already inside the cap.

 

[Reiser99]

Only by the tax amount, surely - I'm sure that last time we delved into it, image rights etc were already inside the cap.

Hmm I can't remember in that much detail. In that case would it affect the salary cap as surely salary and image rights is before tax?