Increased Tax Bills for Players Could Spark Demands for Higher Wages from Teams
Premier League teams are facing the prospect of higher wage bills following the government’s announcement in the financial plan that image rights payments will be treated as income from the year 2027.
This adjustment will leave many top-flight players with substantially higher tax bills, and several agents have indicated that this is likely to be passed on to clubs, particularly for athletes who sign new contracts before the measure takes effect.
Understanding the Consequences of Image Rights Tax Changes
Many players receive image rights paid to corporate entities for commercial earnings, such as endorsement agreements and promotional earnings. Starting in 2027, these will be subject to the 45% top rate of income tax, instead of the corporate tax rate of 25%.
Some Premier League players signed from overseas are believed to include stipulations in their agreements that make their clubs liable for any significant changes to the UK’s tax regime, but those who do not are expected to request higher wages.
Deal Discussions and Financial Implications
A significant number of athletes arrange deals based on net pay, with clubs taking care of their tax affairs, a practice expected to persist. Image rights payments often make up a notable portion of players’ salaries, which is permitted by HMRC if the sum is considered commercially realistic and remains below 20% of overall income, so the increased tax liability for clubs may be considerable.
“With these changes, the authorities is guaranteeing remuneration reflects fair taxation, and providing a clearer picture of the salary expenditures driving economic viability discussions in English football. There will be some short-term pain as teams adapt, but in the future this encourages greater honesty, responsibility and trust in the financial aspects of the game.”
Government’s Move and Past Background
This official step follows a long-running clampdown by the tax office on players' income, which has recouped vast sums of money in unpaid tax.
- Personal branding income will be treated as personal earnings from April 2027.
- Athletes could demand higher wages to compensate for growing tax costs.
- Teams face possible rises in wage expenditures as a consequence.
- The adjustment aims to ensure more equitable tax treatment for top-paid footballers.