HELP! I’m a footballer….. Get me out of a tax saving scheme!
Professional Player Magazine
26 November 2015
Unless viewing media with eyes wide shut, the damage caused to talented high net worth individuals, including many footballers, by tax avoiding or tax mitigation schemes is obvious.
HMRC, the tax authority, wants to maximise the return for the Treasury. It does not care how money was made and targets everyone without fear or favour. People in the public eye (including entertainers, sportsmen and entrepreneurs) are ‘attractive’ targets because of the free publicity which accompanies them.
Jimmy Carr was forced into a very public apology for a ‘terrible error of judgment’ over a tax scheme which had been professionally recommended to him. That was pure joy for HMRC – a high profile entertainer publicly declaring that he had been “morally wrong”.
HMRC uses the Court of public opinion to judge footballers as immoral or borderline criminal for trying to reduce tax payments legally. In most cases the players had professional advice. Stories of star footballers being made bankrupt also adds to the deterrent for others.
What schemes are involved? Film Schemes and Employment Benefit Trusts are the current targets, but there are hundreds, if not thousands, of variations.
Are they all bound to fail? No. Many of the schemes are perfectly fine. The British Film Industry has thrived on the investment attracted by the tax benefit. Problems occur when lines are crossed.
If the scheme is fine, surely that’s ok then? The scheme could be legal but it may not have been right for you, which is why you may have a tax demand.
The scheme is not fine, am I stuffed? It depends. Take advice promptly. Action may be taken in relation to the scheme to make recovery or limit damage.
I’m told to pay more than I saved, is this right? Potentially. You will need to negotiate with HMRC who will take your personal circumstances (including steps you are taking against others) into account.
Is anyone to blame? Quite possibly. Sometimes the scheme itself is at fault and action can be taken. Alternatively, legitimate schemes have been mis-sold by the Banks, financial advisers, accountants or managers; and sometimes secret commissions are paid.
What about me? You are not to blame. There is nothing wrong with acting on advice to reduce legally the tax you pay.
Can I get any money back? Potentially, it depends on your individual circumstances and what happened. Sometimes, the advisers were in a similar positon and have also been hoodwinked. Also you need to be sure that the person at fault has the money to pay you back before you go after them.
What should I do? You should take independent legal advice from an expert who knows what they are talking about not connected with your arrangements.
Will action cost me more than I have? Once you have advice that there is a case to be answered, there are many ways of funding the challenge to minimise your risk and outlay.
Can I trust you? Yes, absolutely. We are here to help and have significant experience in this area; having acted for victims and managers. We will find a solution that works best for you and help you with the media management.
Howard Kennedy acts for a significant number of sportsmen and women and we understand the sports industry from both a legal and commercial perspective. We are here to help you with issues that affect your business and personal life.
Get in touch with us for more information.
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