It's basically HMRC challenging a tax avoidance scheme... https://www.step.org/news/uk-hmrc-attacks-football-clubs-sham-image-rights-agreement-player
There is some real interesting reading, and the 2 things that stick out for me are the comments that with the profits made, it seem poor judgement on the owners part not to have spend more, in order to try and avoid relegation. Bearing in mind how close we came, Ehab really did make a hash of it. Also the amount of interest taken on loans was one of the highest, which isn't a surprise. But as it was supposed to be a gift, it is more telling that those were another tissue of lies we have become used to. On the plus side, the likes of Boro/Swansea/Sunderland must be suffering, with their wage bill one of the highest percentages against turnover in the league. Boro 149%
What's the image rights stuff with HMRC? We can all grumble about what might have been with a bit more investment but we all want them gone and I think they do too. They saw an opportunity and took it, sometimes it's better to fold and not lose your advantage. There's no saying that extra investment would have helped us, look at all the money they threw at Steve Bruce who couldn't get a tune from the players and took us back down with nothing to show for it. With that fresh in the mind they opted not to take that risk and hopefully what they've managed to claw back will make a sale a realistic possibility. Not to mention this was all going on in the backdrop of an actual sale, which fell through at no fault of the Allams. I think it's turned out very well on everyone's part so far.
Isn't it daft where we have a system where 10 years later people who had no involvement are left fighting disputes for dodgy dealings made by others. Whoever is in charge when stuff like this happens should be held liable else you'll never stop it.
It's a bit of a test case, these image right arrangements are very common in the Premier League, we might well still be doing things like this now.
Our footballing philosophy has been uncovered. Spend as little in pre-season as possible to avoid a fans with pitchfork scenario, see how the season develops and spend in January if in a relegation fight, whilst recouping the initial investment plus interest of course. Didn't work last season...
I thought I read somewhere that HMRC thought that 20% or 25% of a players total income may be acceptable as image rights but I dont know if HMRC are still using these figures.
I think the profit bit is (slightly) unfair. No one complained when the club made a massive loss each promotion season due to "giving it a go".
I'm sure it started around the Beckham era. When a player plays in the UK, then they are earning their income in the UK so pay income tax on it. Image rights don't have an associated tax point because the player doesn't need to be in the UK to earn the money. Therefore an agreement is made between the player and the club - lower playing wages and a higher income from image rights - less tax payable by both the club and the player. Only the taxpayer loses out. Seem to recall a lot of image rights stuff being based in Ireland for tax purposes.
What they were saying is that compared to other clubs, based on the turnover the profits were high, and the fact that we were relegated, and if we had stayed up the income would have been much greater than it is in the championship. They feel the owners should have used some of the profit to strengthen the team, so they had a better chance of staying up, and thereby increasing the revenue into the club.
