Tax and football: PAYE and NIC
The rest of us have to pay PAYE and NIC, so why do football clubs feel they can get away with it? Simon Sweetman reports.
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Football and the tax-man
As someone with experience in this sector, I read this article with interest. The FA rule (that Clubs and players take priority above all other creditors) is an interesting point - I assume that it has never been tested in a court so far, but I would expect this factor alone to make other creditors focus on this sector as a higher priority when considering the safe collection of debts. But a couple more points come to mind:
1. It is not the first time HMRC (or formerly HMCE and IR) have looked at Football Clubs - I can recall several old stories going back at least to the early days of the Premier League, and witnessed fairly strong attacks from both former Departments in my own personal experience.
2. With the level of salaries seen in at least the Premier League clubs, it cannot be surprising that a certain amount of attention from HMRC is to be expected. Work the figures out for yourselves - I saw £150,000 per week mentioned in the paper this morning - that is an annual salary of £7.8m per annum for one employee - what's that in PAYE and NI - a few million each year just in respect of that one employee? And then there is VAT on many of the huge outward transfer fees (or some of them anyway) - it must make the biggest clubs among the largest groups of creditors of HMRC you will find.
3. One might even speculate that the shady backgrounds of some of the people getting involved in our top clubs might also tempt the tax-man to focus on the sport - numerous business failures, offshore shareholders, lack of clarity about who is behind some of the consortia expressing interest in investing in some clubs, players owned by undisclosed investors, Panorama programmes about the game, transfer "bungs".....the list hardly inspires confidence in the industry as a safe market to do business in!