Friday 24 November 2017

Players face backlash over tax loophole

Sam Wallace

top Premier League footballers face fresh public indignation today after experts revealed they are using a major tax loophole to protect their multi-million pound salaries from the English tax authorities.

Around 75pc of Premier League clubs are now using a scheme known as EFRBS to allow players to avoid up to 50pc of income tax.

It has become standard practice over the last 18 months, as clubs try to find a way around the problem of losing out to European clubs on players put off by the 50pc top level of income tax in Britain, which will be introduced in April.

It is understood that many leading Premier League clubs, including Manchester City and Chelsea, have used EFRBS -- employer-financed retirement benefit schemes -- in order to make their offers to players even more attractive.

Completely legal, the scheme allows players to sacrifice up to 50pc of their wages at source to be placed in a trust that is set aside for their retirement.

It was first used by City bankers to avoid paying tax on their bonuses but has become very popular with footballers after the Inland Revenue closed down the 'image rights' loophole that was used to great effect in the late 1990s -- and early part of the last decade -- to give predominantly foreign players tax relief.

The EFRBS scheme also allows clubs to save on National Insurance payments -- an extra 12.8pc on top of the player's salary -- because the money is paid straight into an EFRBS and is therefore not liable.

Industry experts believe that there is a very good chance that Wayne Rooney's new deal at Manchester United, understood to earn him up to £200,000 a week including bonuses, would have included an EFRBS.

However, the Premier League's best players, as well as high-earners in the City, are now the subject of British government legislation to close the tax loophole. (© Independent News Service)

Irish Independent

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