Taxation of image rights agreements – vital lessons for football clubs and players from the Hull City Tigers v HMRC decision

Wednesday, 01 May 2019 Author: Akash Nawbatt QC, Sebastian Purnell

In a Decision 1 released on 22 March 2019, the First-tier Tax Tribunal 2 (FTT - Judge Jonathan Cannan) ruled that payments made by a (then Premier League) football club to an offshore service company, purportedly in respect of a player’s image rights, in fact constituted the player’s earnings.

The judgment provides the first comprehensive judicial guidance in almost 20 years as to how the Tax Tribunals should approach the question of whether payments purported to be for use of image rights in fact constitute “earnings”3 of the player (and are thus subject to income tax (PAYE) and National Insurance contributions (NIC)) and the circumstances in which a Tribunal is likely to find that such payments were in fact disguised remuneration.

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Tags: Commercial | Employment | First Tier Tax Tribunal | Football | HM Revenue & Customs (HMRC) | Image Rights | Premier League | Tax | United Kingdom (UK)

The current legal status of image rights companies in football

Written by

Akash Nawbatt QC

Queen's Counsel, Devereux Chambers

Akash Nawbatt QC’s principal areas of practice are Tax and Employment law. He is instructed in complex and high value litigation, and has appeared before the Employment and Tax Tribunals, the High Court, Court of Appeal, House of Lords and the Supreme Court. He is ranked as a leading silk for Tax and Employment by both Chambers & Partners and Legal 500, and is described as "A fearsome cross-examiner," who "really gets to grips with the detail of a case". To follow Akash on Twitter (@AkashNawbatt) click here, and on LinkedIn, click here.

Sebastian Purnell

Barrister, Devereux Chambers

Sebastian Purnell is ranked in the legal directories in all three of his principal practice areas (Employment, Tax and Sport). He has appeared before the Employment and Tax Tribunals, Sports disciplinary tribunals, High Court and Court of Appeal in a broad range of statutory appeals, disciplinary proceedings and judicial review proceedings. Seb is ranked as a leading junior in Employment by Who’s Who Legal and a leading junior in Tax and Sport by Legal 500 which describes him as “thorough, calm and creative, with excellent experience in complex sports tax cases” To follow Seb on LinkedIn, click here.