Newsnight will this evening run a story that Premier League Clubs avoided £250m in tax. The full press release from the authors behind the report suggests that clubs have avoided an astonishing £470m of tax. The numbers are clearly headline grabbing, but is any of this accurate?
The answer is a resounding no. My team and I act for over 100 players across the Premier League, and work with a large number of clubs and agencies.
The numbers are striking but the report is based upon a single, simple assumption – that dual-representation and the role of agents acting for both parties (club and player) is a sham, or as the TPA have called it an ‘artificial contract’, and that agents are only acting for players.
Having acted on hundreds of deals, including some of the biggest in the game, this is categorically not the case. We have had various discussions with HMRC to explain how a contract/transfer negotiation typically works. Of the various HMRC enquiries that we have dealt with, the vast majority have been closed once evidence of the value the club gained from the work of the agent has been provided.
Often an agent is ‘brokering’ a deal between club and player. Typically, the club need the player more than the player (who has a range of clubs looking to sign them) need the club, so it is often the club trying to ‘sell’ themselves and their project to the player, rather than the other way around.
In 2008, The FA considered prohibiting dual representation, but decided against it. At that time, HMRC made it clear that they couldn’t investigate the representation split in every negotiation so would accept that where an agent acted for both player and club on a deal, they would accept that the fees could be split 50/50 between player services and club services.
In March 2021, HMRC issued guidance (following discussions with stakeholders including the Premier League and Saffery Champness) to make it clear that, in future, HMRC expects to see clear evidence for the split in the agency fees between player and club services on each deal.
Both clubs and intermediaries are aware of this and have been keeping evidence for negotiations in the 2021 Summer Transfer window and beyond. We continue to work alongside the Premier League, clubs, intermediaries, players and HMRC’s football unit to ensure football players and clubs are paying the right amount of tax.
Whilst the new FIFA football agent regulations will seek to cap the amounts that intermediaries can earn on a deal, they recognise the practice of dual representation and provide a framework for intermediaries to be paid by both club and player for services provided in brokering a negotiation.
The BBC article made clear that in the 2019/20 season, the Premier League clubs paid £3.6bn in taxes, of which £1.4bn came from Premier League players. The days of tax avoidance schemes and offshore planning are long gone, and players are very aware of their tax obligations, and paying all of their liabilities in full. I am all in favour of a debate around these issues, but it needs to be a balanced debate, and there is a responsibility to both fully understand the issue, and both sides of the argument. If Saffery Champness recruits an employee and pays a recruitment agent, there is no benefit in kind for the employee. Perhaps this should be the case in football, and clubs/players may have overpaid tax by £500m?
We worked with HMRC on their new guidance, and it is being adhered to. So, whilst there will always be disagreements about the club/player services split in a specific scenario, it is crucial to understand the wider context and how both clubs and players alike benefit from the work of agents, rather than suggesting the current arrangements are a sham. Whilst that might not be headline grabbing, it is the reality.
tax officials are investigating the use of so-called "dual representation contracts", which sees an agent paid for acting for both the player and the club involved in the deal.