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The specific planning with which HMRC seems to be concerned is the use of a company to which the footballer has sold the right to exploit his image.  Payments by a club for the use of the footballer's image may be taxed in the company at 28 per cent. rather than in the footballer's hands at 50 per cent. (plus NICs).  The footballer may then benefit from the net payments by taking a loan from the company, which will currently attract a yearly charge of  two per cent (the papers - rather disingenuously - presented this as a one-off charge).

In practice, this type of planning must deal with numerous difficulties - such schemes must successfully navigate a range of avoidance measures including the transfer of income stream rules and the charge on close company loans to participators.  No doubt promoters of such schemes are also asking themselves whether the new "disguised remuneration" rules announced in December will cause further difficulties.

The timing of the stories coincides with the settlement of various outstanding inquiries where HMRC argued that the part of the footballer's overall remuneration allocated to image rights and paid to his company was disproportionate.  Tuesday's Telegraph reported that the Premier League and HMRC are believed to be moving towards a standard grading system under which each footballer's profile would be categorised on a scale from A to E.  The allocated grade would translate into an agreed level at which image rights could be exploited, so that lower profile players would be limited to allocating a smaller proportion of their earnings to image rights.

While there was little sympathy for very high-earning Premier League players, the Sunday Times took the opportunity to warn that excessive income tax risks the flight of wealth-creating city professionals offshore and ran an editorial on the correlation between high personal taxes and the demand for avoidance schemes, citing studies suggesting that 40 per cent is close to the optimal top tax rate and calling on the government to set a target date for removing the 50 per cent rate.

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