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Premier League Clubs & Players Avoid Tax By Not Declaring Benefits-in-kind On Agent Fees


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When footballers move from one club to another or choose to renegotiate a contract with their current club they will often be represented by their agent. More often than not these days, the players’ agents will also represent the club in these negotiations through the use of so-called “dual representation contracts”.

In the UK, the Football Association (FA) has regulations in place to govern the conduct of agents, including a requirement for agents to act in the best interests of their clients and to avoid conflicts of interest. However, somewhat counterintuitively, dual representation contracts are still permitted under these regulations, providing the agent discloses the conflict of interest and obtains the informed consent of both parties.

Under most “dual representation” contracts, clubs and players split the cost of the agents’ fees equally (50:50). This may be the case even if the agent has done 90% of the work on behalf of the player and 10% on behalf of the club.  HMRC is now targeting these dual representation contracts because it believes that they are being used to avoid tax and National Insurance.

How can this be? The agents are paying tax on their income. The club is paying all its taxes according to its profit and loss. The player is paying all their taxes on their salaries paid by their club; or are they?

HMRC believes that in many cases the player is actually avoiding a benefit in kind charge and the club is avoiding class 1a National Insurance.

What is Benefit-in-kind and how does dual representation result in a loss of tax to HMRC?

A Benefit In Kind (BIK) is a term used to describe a benefit an employee or director receives as a result of their employment which is not included in their normal salary or wages. BIKs can be in the form of cash or non-cash benefits. Most familiar will be the provision of a company car or private medical insurance.

A BIK is considered as income and is therefore subject to Income Tax and National Insurance contributions (NICs). The value of the BIK is calculated based on the cost to the employer of providing the benefit which then forms part of the employee’s taxable income.

Employers are required to report the value of any BIK provided to their employees annually on form P11D.

As an example of where Footballers and Clubs may be avoiding tax:

Let us say that a player has enlisted an agent to secure a £10m contract with a Premier League team, and the agent is paid £1m for those services. In many dual representation contracts, the agents fee will be split 50:50 between the player and the club  even if the agent performed 90% of the work on behalf of the player.

The tax and National Insurance paid in the above example have actually been underpaid for the following reason.

If the agent has done 90% of the work on behalf of the player and the agent is paid a total of £1m, the players’ contribution should have been £900k as opposed to £500k. There is certainly nothing wrong in the club paying the agent £400k on the players’ behalf on top of their own contribution, however this £400k now becomes a taxable benefit because it is a liability of the player which has been borne by his employer.

In this scenario, the correct treatment would be for the club to provide the player with a form P11D showing a benefit in kind of £400,000 which the player would include on his self-assessment tax return. That benefit in kind would be liable to income tax at 45% (bearing in mind the level of remuneration for most footballers). The club would have a class 1a National Insurance liability at 13.8%

What has HMRC done to ensure the correct tax and National Insurance is paid?

Football clubs are expected to retain records of fees paid to agents and how they were split with players. They are also required to keep detailed records of the services the agents render to the club and player.

If the fees are split 50:50, clubs must determine what proportion of the payment they have made to the agent should be treated as a benefit in kind.

Advice and guidance on Benefit-in-kind

For detailed advice and guidance on benefit-in-kind and other employer & employee tax liabilities, please contact David Gillies at Friend Partnership.

You can call David on 0121 633 2007 or contact him by email at

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