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HMRC issues new guidance for football agents on tax payments

27 May 2021

New guidance from HMRC has been released regarding the payment of football agents.

The guidance pays particular attention to agent negotiations on behalf of a player or club – for example when managing a transfer to another club or renegotiating a contract – referred to as dual representation.

In cases of dual representation, it might be necessary to split the payment made by the club to the agent to reflect the extent to which the agent represented the club and the player. This will help determine how much of that payment is attributable to the services provided by the agent to each of them.

Previously, HMRC accepted an equal split between the services provided to both the club and the player. However, the new guidance from HMRC’s states it will no longer accept a default split and that “an evidenced and commercial justification” must be made for payments.

Keeping score

HMRC has made an increasing number of personal tax enquiries on footballers over recent years and this guidance marks the start of the formal procedure. Under the new guidance, if a contract states that the agents fee is to be paid by both the club and player, clubs will only be able to rely on the contractual split if is in accordance with that of the negotiations, and they will have to keep detailed records in the form of an audit trail as of evidence of this.

HMRC expect clubs to employ adequate governance regarding money laundering requirements, specifically concerning its payments to overseas individuals or entities.

Full details of the HMRC’s new guidance can be found here.

If you have any questions, please get in touch with one of our team via hello@starboxaccountants.com or by calling us on 01273 043678.

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