Business
Over the next two episodes we’ll be discussing the importance of tax for professional sports people. In episode part one, Martin Rankin an Associate Director in our London tax group joins us, we’ll be discussing current issues with agent’s fees.Seeing a number of enquiries from HMRC in this area, querying the fees paid by clubs to agents in respect of player transfers and contract renegotiations.Common area where queries crop up with HMRC which struggles to understand the nature of transfer negotiations and the relationship between players, clubs and agents. HMRC often seek for documentation confirming a position, which simply does not exist because the common way of doing business is word of mouth and on a handshake.What is the background to this issue?When player signs for a club there will be a fee due to the agent for the work carried on behalf of the club and the player, reflecting agent’s role as an intermediary bringing club and player together.Part of the fee relates to work done for the player and part of that fee relates to work done for the club. With UK resident agents this fee will have 20% VAT added to it.It is quite common for the club to settle the portion of the player’s fee on the player’s behalf. This represents a benefit to the player and the club will include it on the form P11D, which records the taxable value of any benefits a player receives from the club during a tax year.The player pays 45% tax on the value of the benefit and the club pays national insurance on it.The Sports & Media podcast pageSmith & Williamson’s Sports, media & entertainment webpage This episode was recorded on 25/11/2020This S&W The Pulse podcast is of a general nature and is not a substitute for professional advice. No responsibility can be accepted for the consequences of any action taken or refrained from as a result of what is said. The views expressed are not necessarily those of the presenter or of Smith & Williamson or any of its affiliates. No reproduction of this podcast may be made in whole or in part for professional or recreational purposes. No action should be taken based on this podcast and we accept no liability if we change your views on any of the subjects mentioned.