Newcastle United Settle HMRC Dispute Over Players Image Rights

March 6, 2012

English Premier League club Newcastle United have settled its tax dispute with HM Revenue & Customs over the payment of image rights to players.

Owner Mike Ashley, Sports Direct founder, will disclose the agreement this week when it announces upbeat full-year results.

Newcastle Utd is not expected to reveal how much it paid to settle the dispute, however it is understood to be less than the contingent liability the club put aside in previous years’ accounts.

The settlement covers all outstanding disputes with HMRC, an insider said. The bulk of the matter is understood to relate to the payment of image rights to its footballers. By labelling payments image rights rather than salaries they can be paid to companies, often offshore, and attract corporation tax at 26% rather than higher rate income tax at 50%.

Although only Chelsea and Newcastle have released information on settlements with HMRC, most Premiership clubs are understood to have come to agreements covering past liabilities and future treatment of payments.

An HMRC spokesman said: “The majority of premier league football clubs have now confirmed that they will pay tax arising from image rights payments, and we continue to negotiate with those that are yet to settle.”

by Ismail Uddin