The English Premier League (EPL) is the most profitable soccer league in the world, making its players among the best-paid athletes on the planet. A quick search reveals that the average weekly salary of EPL players is just slightly over £60,000, which translates to a little over £3 million a year – a handsome amount by any standards. Star players are on the other hand paid significantly more with some like Manchester United forward Cristiano Ronaldo, who is currently the league’s best-paid player, reeling in upwards of £26 million a year. Most fans, however, always wonder whether the tax man comes knocking on their doors or he always loses their address for some strange reason.
Do Premier League players pay tax? Premier League players do pay tax on their earnings as they operate within England’s jurisdiction and are thus subject to its laws just as much (if not more) as they are subject to the regulations of the league and other relevant soccer governing bodies like the Football Association (FA) and FIFA. A failure to pay tax on their income would therefore constitute a criminal offense that is punishable by law.
A Brief History of Taxation in the EPL
In order to adequately discuss taxation in the EPL, we’d need to look at the events surrounding July 1985 since that was when professionalism was allowed in football in England. Before then, the FA mandated that all players maintain their amateur status – an ideal that was aimed at maintaining the sanctity of the sport but that was both unrealistic and unsustainable.
A number of teams adhered to the mandate but some, especially those that wanted an edge on their competition, resolved to secretly employ players professionally. In order to fly under the radar, such teams often secured “employment” for the players in companies or industries that were owned by club owners or their affiliates.
Most clubs that indulged in the then frowned-upon practice sourced their players, who subsequently came to be referred to as “professors” in club circles, from England’s northern neighbors, Scotland, who were notorious for producing outstanding players.
Clubs that did not adhere to the FA’s directive found themselves on the receiving end of the governing body’s wrath. A good example is former top-flight side Preston North End, who were expelled from the FA Cup competition in 1884 after one of their officials admitted to paying players.
It would therefore be safe to assume that players in the top flight like the EPL began getting taxed in the years after 1885 since it is then that they were officially recognized as employees and gained access to the rights and responsibilities afforded to other members of the workforce.
Present Day Developments
EPL players have come a long way from the tribulations they faced in the yesteryears thanks largely to the efforts of the players that came before them like Manchester United legend Billy Meredith, who was one of the forces behind the formation of a Players’ Union that grew into the Professional Footballers’ Association of today.
The union championed key reforms that began creating the conducive working environment that current EPL players are enjoying. Among them was the abolition of the maximum wage and regulations that restricted the free movement of players between clubs.
Agreements between players and clubs are now more formal (executed in adherence to contract law) and are thus afforded sufficient legal protection. Before, such arrangements were essentially gentleman agreements that mostly benefited clubs and their ownership whenever players sought redress for wrongs committed against them.
Which Taxes Do EPL Players and Clubs Pay?
As employees in England, EPL players are subjected to the income tax (pay-as-you-earn or PAYE) allocated to their respective tax bracket which currently stands at 45% for those who make more than £150,000 a month.
Some quick math (£60,000/week x 4 weeks = £24,000) denotes that that is more or less every current player. Though these figures seem a bit excessive, they are quite standard and actually well below what other players in Europe play.
For context, a soccer player who earns the same wages in Denmark’s top tier, the Danish Superliga is taxed an absurd 55.9% of their income while those in France’s Ligue 1 have to part with 55.4% of their monthly salary.
Things are not much different for those in Spain’s La Liga as they have to pay an income of 54%. Surprisingly, players in the other two top football leagues in Europe – Germany’s Bundesliga and Italy’s Serie A – are still subject to a higher tax rate at 47.5% and 47.2% respectively. With these figures in mind, it is no wonder that England is considered a “tax paradise” for foreign players.
Aside from their income tax, EPL players also have to make national insurance contributions of around 2% whereas EPL clubs are required to make the same contributions but at around 15%. However, as companies, clubs are only required to pay a corporation tax of 19%.
Do EPL Players Evade/Avoid Paying Tax?
In 2020, it was revealed that Her Majesty’s Revenue and Customs (HMRC), England’s tax authority was investigating over 200 EPL players over violations relating to what may be considered to be tax evasion or flat-out tax avoidance.
The HMRC is believed to have been of the opinion that a number of players were exploiting a tax loophole relating to the payment of image rights taxes to escape or otherwise circumvent their tax obligations.
In what appeared to be an imaging trend, players were structuring their contracts in a manner that allowed a majority of their income to be paid to them as image rights via companies that they owned or controlled. Alternatively, players purportedly signed two contracts – a “smaller” contract with their club and a larger one with their club and their preferred image rights firm.
By allegedly channeling a portion of their income through the firms, the players are then only subject to the 19% corporate tax as opposed to the 45% income tax they would ordinarily have to pay. Current and former players like ex-Red Devil star Wayne Rooney, Michael Owen, Theo Walcott, Ashley Cole, and Real Madrid ace Gareth Bale are rumored to own or have been linked to such firms.
Though purists look down on this practice, one can’t help but appreciate the lengths that players supposedly go to secure their livelihood. This is a divisive topic since it is dependent on the school of thought one is subscribed to – those that view it as blatant tax evasion and/or avoidance and those who view it as creative accounting by players to keep their hard-earned money in their and their families’ pockets.