Monday, February 08, 2010

Football premier league seeks elite opt-out

From the FT:

"The Premier League will attempt to broker a deal with the tax authorities this week on behalf of its football clubs and players to protect their sponsorship deals and prevent the loss of up to £100m ($156m) in taxes."

It's not exactly a loss, though, is it? It's a transfer -- from super-wealthy players to ordinary taxpayers -- that's at stake here.

So what's going on?

"Instead of paying all of a player’s remuneration in salary, clubs are paying some money into image-rights companies that tend to be based offshore and are therefore out of reach of tax officials."

Well, not quite out of reach: although we haven't investigated this particular racket, it seems to be a transfer pricing game to transfer a share of the money, presumably legally, from taxpayers to super-wealthy sports stars. These "image-rights" companies which players set up "to enhance and protect their public profile" serve no useful purpose than to effect this transfer.

Now the British tax authorities have decided to tackle the iniquity of this system. The Premier League's solution?

"One idea he [Javed Khan, the Premier League’s finance director] wants to examine is a banding system that would place big-money earners in a top band. These players would be able to assign a higher percentage of salaries to image-rights payments than players in lower bands."

Great! Set up and institutionalise a system that makes the poorer players pay more, and lets the really wealthy ones pay less! This, combined with the sort of attitude we noted here, is what the offshore mentality seems to be all about.

A last word to the British revenue authorities, displaying an attitude that seems rather more reasonable:

“The government remains committed to ensuring everyone pays their fair share of tax and that the minority who seek not to do so should not succeed.”


Blogger Demetrius said...

What is omitted from all this is the extent to which a number of Premier League clubs are being subsidised and supported indirectly through the nationalised banks. Despite dodgy balance sheets and practices some of them have huge loans at rates and conditions that would never be allowed to ordinary firms or commerce. As a very high proportion of the revenue of these clubs goes to the players and their agents indirectly the taxpayers are supporting their earnings and lifestyles. So now the clubs want more?

10:21 am  

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