Wayne Rooney loses complaint over coverage of his income tax
Published 17/08/2011 | 12:57
Manchester United striker Wayne Rooney has failed to win his complaint to the press watchdog over a newspaper story suggesting he paid only 2% tax.
The article was published on January 16 with the headline: "Top footballers dodge millions in income tax: Rooney pays 2% on some earnings."
The player complained to the Press Complaints Commission (PCC) over the accuracy of the Sunday Times story and his lack of opportunity to reply.
The article reported on the tax arrangements of a number of footballers and claimed that Rooney had saved nearly £600,000 by taking £1.6 million in loans rather than as income over a two-year period.
The player said the headline was inaccurate and misleading, and that the loans were in fact subject to corporation tax at 28%.
It would also not be possible for any person to pay a rate of 2% on any part of their earnings, he argued.
He said the loans were paid back the following year, which had not been mentioned in the article.
The newspaper said that current legislation classified such personal loans offered by limited companies, which was a perfectly legal tax mitigation device, as a benefit in kind, thus incurring a rate of only 2% on the total sum of the loan.
Rooney had, it said, employed such a strategy by structuring some of his finances through a limited company.
It said readers would not have been misled by the headline, and would have understood that the arrangement would be explained in the article itself.
In its ruling, the PCC did not find a breach of Clause 1 of the Code regarding accuracy. It acknowledged that the headline did require "further explanation" because it was not "the full position", but this information was covered in the article.
The story made clear that not only was the arrangement legal, but that the money - which had already been subject to corporation tax - was a director's loan in respect of which tax was paid. It also made clear that it was likely that the loan would have to be repaid.
The newspaper had also offered to make clear that Rooney paid all his taxes at the legally required rate, which the Commission considered to be a "sensible and proportionate" response. As a result, Clause 2 (Opportunity to reply) of the Code was not relevant.
Stephen Abell, director of the PCC, said: "This was a complicated financial arrangement and it was important for the Commission to consider the circumstances in full.
"The Commission's case law consistently makes clear that headlines - which are by their nature reductive - need to be read alongside the accompanying article."
"As a result, the complaint was not upheld".