Tax-dodging footballers are "red rag to a bull", says tax expert

Date: 11th June 2009

High-earning professional football players planning to utilise a legal loophole and avoid the 50 per cent tax bracket should be wary, according to the tax profession.

The loophole in question currently allows footballers to accept their wages as an interest free loan from their clubs, which carries with it just 2.5 per cent tax.

In the future clubs could write off the loans and treat the payment as a salary. If the tax rate had been reduced at the time of the transfer, the players would pay tax at the new rate plus the 2.5 per cent.

This could potentially save the players large sums of money and see HMRC lose out.

Due to the level of publicity football receives in this country however, particularly the wage levels of the highest earners, such a move is not likely to go unnoticed by the government.

Richard Mannion, national tax director at Smith and Williamson, said: "It would be a red rag to a bull. The Revenue will look at it closely," according to Accountancy Age.

HMRC has yet to comment on the matter.

The 50 per cent tax rate is set for introduction in April 2010.

Premiership wages rose 23 per cent to a total of £1.2 billion in the 2007/08 season, according to Deloitte's annual review of football finance.