Premier League clubs avoided £250m in tax, expert estimate
Financial experts estimate that Premier League football clubs may have avoided paying £250m in taxes over a three-year period through the use of dual representation contracts by football agents.
The practice involves agents being paid for representing both players and clubs in negotiations, including transfers, resulting in half of the payment avoiding tax.
The Tax Policy Associates think tank estimates that the use of dual representation may have saved players, agents, and acquiring clubs £81m in 2019, £91m in 2020, and £81m in 2021.
However, HM Revenue and Customs has launched investigations into several clubs suspected of using the practice.
At present, it’s unknown which clubs are being investigated, but the teams thought to have benefitted most from dual representation in the past few years include Manchester City, Manchester United, Arsenal and Chelsea.
HMRC could issue penalties and demands for repayments if it finds that an agent has not legitimately been working for both the player and the club when brokering transfer deals.
‘Misunderstanding of football markets’
But the Association of Football Agents (AFA) said it disputed the think tank’s findings, saying there was a “fundamental misunderstanding of how the football transfer market works”.
It said: “The AFA’s members will continue to work closely with HMRC to ensure that the law and current guidance is followed in the structuring of arrangements with tax consequences, as they always have.”
An HMRC spokesperson added: “Dual representation cannot be assumed to be a tax avoidance scheme; its use can be tax compliant.
“However, we carefully scrutinise arrangements between clubs and employees, and we work closely with the football industry to educate and deal with tax risk head on.
“Our actions and the money bought in from this industry speak for themselves. Since 2015, from across all tax areas in the football industry, we’ve recovered £573m that would otherwise have gone unpaid.”
‘PL football £7.6bn to the UK economy’
A Premier League spokesperson said: “We believe that the overall figure suggested here is based on assumptions that do not recognise the individual circumstances of each transaction.
“During the 2019/2020 season Premier League football contributed £7.6bn to the UK economy. In the same season the Premier League and its clubs generated a total tax contribution of £3.6bn to the UK Exchequer, £1.4bn of which was accounted for by Premier League players.”
Related stories
- Premier League football helps UK economy rebound
- Independent regulator for English football. Will it protect the game?