Musing on football and tax
Catching up on one of my key interests at the weekend (football gossip) I looked at the media coverage on football transfers, especially Pogba.
The numbers are huge but what is also interesting (to me at least) is the impact tax has on his offer. Assuming his rumoured £220,000 a week - £11.44 million a year - is all for playing football and so taxed under PAYE his net will drop to £121,267- or £6.306 million a year. And that is assuming he can opt out of UK national insurance.
I do appreciate that in anyone’s terms that is still a generous amount of money BUT there is another point; if, as rumoured, his new employer pays his agent’s fee of £18.4 million then some or all of it will be taxable on him. Ignoring the technicalities on collection - if he has to pay tax on all of it, his net pay for his first year will be negative; he will have no net income and will owe HMRC £1.974 million!
I hope someone has done some planning.
Date: 26th July, 2016
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