the clubs of Premier League The English avoided paying up to 250 million pounds (284 million euros) in taxes between 2019 and 2021, according to estimates by the firm Tax Policy Associates (TPA). The study confirmed that the practice was carried out on an “industrial scale”, through a system that “artificially structured” the payments made by the clubs to the players’ agents. Since 2015, the TPA estimates that Premier League clubs have avoided paying up to 470 million pounds (534 million euros).
After the publication of the report, the United Kingdom Treasury confirmed that it was investigating “a number of teams” and although it did not offer details, British media confirmed that Manchester City, Manchester United, Arsenal and Chelsea, among others, have benefited in recent years from this practice financially.
“The purpose of this scheme is to avoid employment taxes and VAT imposed on the large commissions paid to soccer agents. In reality, these agents work for the players. But the system creates artificial contract where the agent acts for both club and player, in so-called ‘dual representation contracts’,” explained Tax Policy Associates in the report.
According to the firm, clubs pay “half of the fees”, despite the fact that the players “really benefit from all (or almost all) the agent’s work”, and these fees, stressed he, “avoid paying income tax, social security and VAT”.
Experts maintain that if only the player took the payments from his agent, the Treasury would receive about 60% of the total taxes, although that amount is halved when the bill is divided by between the club and the footballer through the aforementioned “dual representation contract”.
The TPA estimates that this practice has resulted in tax savings to players, agents and clubs of 81 million pounds (92 million) in 2019, 91 million (103) in 2020 and 81 million (92) in 2021, exceeding 250 million pounds (284) in three years.
The figures for the major clubs in 2021, the company added, are at 10.9 million pounds (12.3) for Manchester City, 10 million (11) for Manchester United, 8.1 million (9.2 ) for Liverpool, while the highest that save was recorded by Chelsea. in 2020, with 12.8 million pounds (13.6).
2021 Treasury announcement
The BBC recalls that the Treasury issued an order in 2021 to force clubs to specify that agents work legitimately for both parties, to avoid fees splitting 50% between the entity and the player and the contract reflects the true nature of the representation.
A spokesperson for the Treasury explained to that medium that it “cannot be assumed” that it is “a tax evasion scheme” because its use may “comply” with tax regulations. “However, we are carefully reviewing the agreements between clubs and employees, and we are working closely with the football industry to educate and address the tax risk,” the source added.
Source: La Verdad
I’m Rose Herman and I work as an author for Today Times Live. My expertise lies in writing about sports, a passion of mine that has been with me since childhood. As part of my job, I provide comprehensive coverage on everything from football to tennis to golf.
