Magpies been hoarding
As a sequel to ‘Taxman Cometh’, one Premier Club has been tackled – Newcastle United.
Apparently the Club had set aside an amount to pay but the actual figure yet to be disclosed is predicted to be less than the contingent liability that the Club had calculated and ‘stored’ in previous accounting.
Newcastle United has settled its claim for outstanding tax by the HM Revenue & Customs over the payment of “image rights” to players.
The majority of arrears is understood to relate to the payment of image rights to its players. It is said, a ‘loop hole’ had been taken advantage of and by classifying these payments as image rights rather than salaries they could be distributed to companies (including offshore). Thus, benefitting from reduced corporation tax (26% rather than higher rate at 50%).
I understand that Chelsea and Newcastle have dealt with HMRC though other premiership clubs are following suit. A HMRC spokesman has quoted that: “The majority of premier league football clubs have now confirmed that they will pay tax arising from image rights payments, and we continue to negotiate with those that are yet to settle.”