Football: HMRC crack down on sports image rights payments!

By Athena Constantinou, Managing Director, APC Sports Consulting, Nicosia, Cyprus

Following a House of Commons Parliamentary Report in 2017, which concluded that tax avoidance in football was becoming widespread, the UK Tax Authority (HMRC – Her Majesty’s Customs and Revenue) has established a Specialist Football Compliance Project to oversee tax compliance in the football industry – not only in relation to football players and clubs but also in relation to their agents (now ‘intermediaries’).

Since the 2015-16 football season, HMRC has clawed back over £330 million in tax revenue!

HMRC has confirmed that it is currently investigating the tax affairs, including alleged image rights abuses, of 171 professional football players, 44 league clubs and 31 football agents.

In a statement, HMRC has remarked in the following terms:

“We carefully scrutinise the individual arrangements between football clubs and their players to make sure the right tax is being paid in the UK.”

Since the UK Special Commissioners of Inland Revenue decided, in the landmark Sports Club case in 2000, that payments for playing the game and payments for the commercialisation and exploitation of players’ image rights could be treated separately for tax purposes, HMRC, opposed to this ruling, has been trying to claw back, wherever, possible any lost tax revenues.

In fact, some UK tax advisors have commented that, in the quest to do so, HMRC has been engaging in so-called ‘fishing expeditions’ to catch players out regarding their image rights. Football being not only the world’s favourite sport, but also its most lucrative one, has led, perhaps, to HMRC regarding football as a potential ‘cash cow’ to be milked whenever it is possible to do so, for tax revenue purposes.

Of course, HMRC has been helped – perhaps encouraged – in this quest to claw back tax revenue by remarks made by the UK and other Governments condemning ‘aggressive tax avoidance schemes’.

This is misleading, to say the least, because, as a matter of law, tax avoidance – that is, putting in place arrangements to avoid or mitigate tax – is perfectly legitimate, whilst tax evasion – that is hiding taxable income – is not, but, in fact, is a criminal offence.

HMRC is particularly examining tax schemes and structures put in place by players to isolate sports image rights revenues and thereby escape tax on them. As Kevin Offer in his GSLTR post of 22 November 2018 has quite rightly remarked these arrangements must have a real commercial basis to them.

Handled correctly, therefore, unnecessary tax can be saved – quite legitimately and responsibly!

Another potential area of controversy between players and HMRC – and, indeed, with other Tax Authorities – is the valuation of image rights – or, more properly, the overvaluation of them – for tax purposes.

There is, therefore, a need for professional and independent valuation advice to be available in this respect and this something that APC Consulting is able to provide. See their dedicated website at ‘’ for more information.

Athena Constantinou may be contacted by e-mail at ‘’