Wednesday, June 27, 2012

Why UK's domicile rule damages British football

The satirical UK magazine Private Eye, which provides some of the UK's best tax reporting, makes a powerful yet simple argument, about how one of the UK's prime tax haven offerings - the special tax exemptions given to so-called 'non-domiciled' residents - has made UK national football less competitive, and helps (along with the curse of penalty shoot-outs and other phenomena) account for the perpetually dismal performance of the UK's national football teams in international competitions.

The argument is very simple indeed, and unarguable. "Non-domiciled" foreign players must pay far less tax than native British players do, and this effectively makes British players uncompetitive in the bidding competitions for talent. As the Eye puts it:
"It's far cheaper to buy a decent striker than develop a home-grown one.

This is in large part down to state-sponsored tax dodging in the form of the non-domicile concession for which foreign players qualify. The large chunk of their fees that are designated for “image rights”, plus earnings for playing abroad, can all be kept untaxed offshore, giving overseas players a major advantage over their home-grown rivals. The same net wage for Julio Geordio costs far less than that of Roy of the Rovers."
If British teams wants to win international competitions, then the domicile rule has to go.

(UK players do, to be fair, try to get around their home tax rules. But evidence is accumulating that many of the strategies they use may not just be immoral and legally dubious - but frequently dangerous to the players too.)

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