Taxman blitz on super-rich football stars: HMRC investigates secret perks given to players and their families


  • Questionnaire send out to 24 clubs asking for details of luxury gifts

  • Stars such as Wayne Rooney, John Terry and Frank Lampard subject of probe

By
Lara Gould and Robert Verkaik

Last updated at 10:56 PM on 31st December 2011

Premier League stars and their clubs are being investigated by the taxman over the secret perks enjoyed by players and their families.

Investigators from Her Majesty’s Revenue Customs have interviewed finance directors at Britain’s richest clubs to establish the extent of benefits lavished on footballers.

Officials from HMRC’s High Net Worth Unit – which usually targets the tax affairs of those worth £20million or more – have also sent out a questionnaire to at least 24 leading clubs demanding details of free holidays, luxury accommodation and other gifts.

Roman holiday: Frank Lampard and Elen Rives enjoy a break on one of boss Roman Abramovich's yachts

Roman holiday: Frank Lampard and Elen Rives enjoy a break on one of boss Roman Abramovich’s yachts

Information provided by the clubs will then be cross-referenced against stars’ individual tax returns to assess whether players could  be liable for any unpaid tax or if clubs could be forced to make additional National Insurance contributions.

The probe raises the prospect of clubs having to disclose the full array of benefits received by England stars such as Wayne Rooney, who commands a £13million salary, and John Terry, who earns £7million.

HMRC investigators refused  to reveal which clubs they had already targeted. Spokesmen for Manchester United, Manchester City, Chelsea, Arsenal and Tottenham all declined to comment.

An HMRC spokesman would not reveal the full details of the document sent to leading teams, entitled The Football Clubs Employment Issues Questionnaire.

But he confirmed that it had been compiled to establish how clubs  officially account for the benefits received by stars.

A source said: ‘We are not talking about a few low-cost gifts. These people are multi-millionaires.

Rich man's plaything: One of Roman Abramovich's yachts. An HMRC source said the agency was 'not talking about a few low-cost gifts'

Rich man’s plaything: One of Roman Abramovich’s yachts. An HMRC source said the agency was ‘not talking about a few low-cost gifts’

‘We wouldn’t be doing this if we didn’t think it was going to bring in a lot of money.

‘It doesn’t matter where you come from. If you work in the UK you  are liable to pay tax on your UK  earnings.

‘Employers are required to deduct tax from your earnings.’

He added: ‘If HMRC feel there are discrepancies or there are answers they are not happy with it could  trigger an investigation.’

The sort of perks that may attract the Revenue’s attention could be first-class flights, holidays, company cars, use of club credit cards, health care and private security. He said the team of inspectors would even look at whether clubs declared tax on payments made to players for appearances on the football clubs’ own TV stations.

The Revenue says its investigation has been prompted by ‘intelligence’ about non-disclosure of benefits.

In the money: Football players such as Manchester United's Wayne Rooney - pictured with his wife Coleen and son Kai - now rank among Britain's wealthy elite

In the money: Football players such as Manchester United’s Wayne Rooney – pictured with his wife Coleen and son Kai – now rank among Britain’s wealthy elite

In the past decade, players such as Rooney, Terry, Frank Lampard and Steven Gerrard have joined the ranks of Britain’s wealthiest.

In 2007, Chelsea’s Terry was given a two-week trip aboard a £72million yacht belonging to club owner Roman Abramovich. Terry’s teammate Lampard has also been pictured on another of the Russian oligarch’s yachts with his former partner Elen Rives.

Two years ago, Lampard was said to have used Abramovich’s box at the O2 Arena in London to watch pop singer Beyonce Knowles in concert.

Many Premier League clubs own properties for new signings to move into when they arrive in the UK. It  is believed the arrangements could allow the players to live rent-free while they search for accommodation. There is no suggestion that  any of these players or clubs have avoided paying tax or are involved in wrongdoing in any way.

Controversial: A spokesman for Chelsea's John Terry declined to comment on the player's tax affairs

Controversial: A spokesman for Chelsea’s John Terry declined to comment on the player’s tax affairs

Under HMRC rules, benefits for the stars are likely to be taxed at the 50 per cent rate of income tax payable by those earning £150,000 a year or more. Clubs are also liable for National Insurance contributions on any expense or benefit given to employees, which is usually calculated at 12 per cent of the market value of the benefit in kind.

Chas Roy-Chowdhury, head of taxation at the Association of Chartered Certified Accountants, said: ‘There is a vast array of benefits for football players which would not happen for ordinary employees but they are all taxable. Holidays, some gifts, medical care, cars, mobile phones, meals, accommodation; all these would be taxable as benefits.’

However, he said HMRC may find its rules difficult to enforce as players and clubs dispute what exactly constitutes a benefit in kind.

Bobby Barnes, deputy chief executive of the Professional Footballers Association, said: ‘Throughout the Premier League I really don’t think that there are many owners who are putting yachts and holidays at the disposal of players.

‘Many Premier League players have a lot of perfectly sensible holiday accommodation of their own. Most players have accountants and specialist financial people who help players file their tax returns and can advise them on benefits.’

Asked about the HMRC investigation into perks, a Premier League spokesman said: ‘Benefits-in-kind payments are not something we  are aware of, so obviously we can’t comment on them.’

Two years ago the Premier League brought in rules that make clubs report details of their PAYE systems. It is understood that these have not uncovered problems concerning tax paid on benefits.

The HMRC said: ‘In these difficult times we are determined to make sure the well-off pay their way.’  The Revenue’s High Net Worth Unit, dubbed the Affluent Unit, was founded in 2009 to focus on 5,000 of the country’s top earners. In its first year of operation the unit clawed back £85million in unpaid tax.

A spokesman for John Terry confirmed he had used Abramovich’s yacht but said his tax affairs were private and so he was unable to discuss whether Terry’s stay amounted to a taxable benefit.

A spokesman for Lampard said: ‘All of Frank’s tax affairs, both personal and business, are up to date and have been submitted annually to the Revenue and have been approved.’

 

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