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HMRC guidance: image rights and tax

18 August 2017

HMRC has published additional guidance on some of the employment tax issues in relation to ‘image rights’ paid to high-profile individuals, such as celebrities and professional sportspeople.

The issue is particularly topical given the high profile activity by tax authorities overseas in relation to footballers in recent months.

The issue also received comment in the Budget earlier in the year and the Public Accounts Committee hearings with HMRC.

The matter is also timely given that the football transfer window is open and will close on 31 August.

Gary Ashford, Tax partner said: “HMRC are setting down a clear marker to clubs reminding them that payments of image rights may actually amount to a payment of earnings.

“They also point out that in certain cases clubs might actually have a requirement to withhold tax on payments made overseas. It is essential that advice is taken when considering this issue.

“It is also worth noting that, over the last number of years, HMRC has introduced very significant sanctions to matters where offshore tax planning, which includes image rights planning, has proven to be non-compliant, even where simply on a technical point.

“It is recommended that historical structures are reviewed to make sure there are no surprises in the coming years.”

If you would like further advice on this topic, you can contact Gary Ashford, Bob Mitchell or Michael Lister.

For more information, you can visit the HMRC website here.

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