HMRC pursuing dual representation in the Premier League


25th April 2023

Tax Policy Associates has predicted that Premier League football clubs may have avoided paying £250 million in tax, over a three-year period. This is due to dual representation by agents.

Dual representation

An agent would normally represent one side – either the club or a player – in a negotiation such as a new contract, acting in that party’s best interest. However, HMRC is now looking into ‘dual representation contracts’. This is where the same agent represents both the player and the club on transfers, negotiations, or new contracts.

Dual representation is prohibited by FA rules, however it can be allowed if all parties provide written consent. In reality, this is happening increasingly frequently, with FA data in 2021 showing that 68% of Premier League player deals were completed with dual representation.

Under this practice, the portion of the fee relating to work for the club avoids VAT, Income Tax and National Insurance. With the size of transfer fees and contracts in the Premier League, it is clear that the tax at stake can be significant, hence why HMRC is taking a keen interest.

In 2021, HMRC updated its guidance on this issue and tightened the rules, by stating that clubs need to keep records of evidence that they are legitimately working on both sides of the contract and need to show to what extent they represent both parties. HMRC does not accept a default 50/50 representation split. Providing HMRC with this level of detail about each deal carries in terms of administration and implementation for both agent and football club.

HMRC action

HMRC is now said to be investigating “a number of clubs”. Whilst these clubs are not disclosed, the BBC names Manchester City, Manchester United, Arsenal and Chelsea as the clubs thought to have benefitted from dual representation the most.

If HMRC’s investigations find that the agent has not been legitimately working for both club and player when brokering transfer deals, HMRC will demand repayment of the lost tax and will look to charge a penalty.  This could be up to 250% of the tax for an offshore asset.

The BBC quotes an HMRC spokesperson who states that the regulator has “recovered £573 million from the football industry that would otherwise have gone unpaid”. We know first hand that HMRC has a dedicated team focusing on the football industry, due to the transfer fees involved and the public interest. Previously, we have seen a lot of HMRC activity around the structuring of image rights payments, and dual representation seems to be the new area of focus.

Seek professional advice

If you or a client has been contacted by HMRC, or believe this may be a possibility, we recommend immediately seeking professional advice. This will help to mitigate any penalties which may be due, and an experienced professional advisor can help navigate the disclosure or enquiry process. In addition, your advisor can assist with related issues, such as agreeing a payment plan with HMRC for any potential liabilities concerned.

At haysmacintyre, we have a wealth of experience in making successful disclosures and resolving disputes with HMRC.  We have a proven track record in obtaining the most favourable result for clients, allowing them to draw a line under the matter and move forward without further intrusion from HMRC.

Should you require any assistance, please contact Danielle Ford, Partner and Head of Tax Disputes & Resolutions or Riocard Hoye, Senior Manager.

Danielle Ford

Partner, Head of Tax Disputes & Resolutions
+44 20 7969 5591
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