Premier League clubs’ success could earn HMRC £40m windfall
Premier League clubs’ unprecedented success in Europe this season could earn HMRC a £40m windfall, according to tax experts.
Bonuses paid out to players for winning domestic and continental trophies could hit £70m, generating a lucrative pot for the taxman, if Arsenal, Aston Villa and Crystal Palace clean up in the next two weeks.
The Premier League could see its representative clubs win all three of the European club competitions – the Champions League, Europa League and Conference League – while a domestic cup double for Manchester City or a possible Champions League/Premier League double for Arsenal could also generate mega handouts for players.
HMRC Premier League tax boom
“Let’s say Arsenal players could earn c£2m for a full double with maximum appearances, with Villa and Palace bonuses scaled to club size and competition level,” Forvis Mazars partner Ian Goodwin said. “Scottish bonuses would likely remain more modest. The FA Cup [won by City on Saturday] also provides a welcome but smaller top-up.
“This means player bonuses could be in the region of £40m-£70m-plus in aggregate, with HMRC then potentially collecting in the region of £20m-£40m-plus in income tax and NICs from these end-of-season payouts alone.
“Recent HMRC audits into football clubs demonstrate the scrutiny tax affairs are under, as well as publicised National Minimum Wage compliance activity, showing the Government and exchequer’s interest in the sport, even if their teams may not be up for trophies at the climax to the season.”
A highly profitable season of football for the government could offset some of the damage done should West Ham United get relegated.
London Mayor Sadiq Khan last week said that the taxpayer could lose around £2.5m per season should the Irons be sent down to the English pyramid’s second tier. It comes after the club secured a favourable deal with then-mayor Boris Johnson over use of the former Olympic Stadium.