Film Stars, Top Soccer Players Snared In Second U.K. Movie Investment Tax Dodge

By Daily Mail Reporter

Updated: 09:42 EDT, 17 January 2011

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Top Premiership footballers like Wayne Rooney and Gareth Barry are avoiding millions of pounds in tax - and it's all legal.

They are using complex tax avoidance schemes that allow them to pay as little as two per cent on the earnings.

Manchester United star Rooney has saved almost £600,000 over the past two years by using the tax loophole.

Wayne Rooney Gareth Barry

Small tax bills: Wayne Rooney and Gareth Barry  have saved hundreds of thousands of pounds

Manchester City's Barry  took home £135,000 more than if he had paid income tax at 40 per cent.

Now the taxman  has demanded the clubs pay £100 million on behalf of their players as HM Revenue & Customs (HMRC) investigates how to stop the arrangement.

The Sunday Times has uncovered 55 players who are taxed at just 22 per cent because they get a large proportion of their total earnings from their image rights companies.

In the money: Theo Walcott has set up his own company

In the money: Theo Walcott has set up his own company

These include England and Chelsea defender Ashley Cole, former husband of singer Cheryl, Manchester United's Rio Ferdinand, and his team-mate Michael Owen whose company Owen Promotions owns 11 racehorses.

Arsenal's Theo Walcott has TJW (Promotions) while David James, the former England goalkeeper has Toocoo.

Scores of top footballers launched their own companies eligible to take image rights payments after Labour Chancellor announced the 50p top rate tax.

The players have two contracts with their clubs. They get a salary as a player and the other is for 'image rights' - earnings from shirts and other merchandising.

These royalties are paid into a company which is only liable for 28 per cent corporation tax rather than the 50 per cent income tax.

And players can take out loans from their companies where they only pay two per cent tax on the sum because it is regarded as a benefit in kind.

Investigations by the Sunday Times showed the £200,000-a-week Rooney, Barry and Chelsea's Daniel Sturridge took advantage of  this tax loophole.

HMRC have confirmed they are looking at players' companies as part of their probe into image rights and tax avoidance.

They have demanded the money from the soccer clubs to make up for  the shortfall in tax revenues after they overstated the proportion of players' income that was coming from image rights.

Source : http://www.dailymail.co.uk/news/article-1347677/Top-footballers-like-Wayne-Rooney-dodge-millions-tax-cashing-loophole.html

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