The "taxman has struck a secret deal with Premier League football clubs which allows them and their superstar players to reduce their tax bills," according to Bentley & Faulkner of the London DAILY MAIL. Under the agreement, "clubs have been told they can pay up to a fifth of their footballers' total pay packages" to "image rights" companies, rather than as part of their wages. The deal allows "fabulously wealthy footballers to reduce their income tax bills significantly." Instead they pay corporation tax "at a lower rate on this part of their income." It also allows the clubs to cut the amount of National Insurance contributions they pay. ManU, Chelsea, Man City, Arsenal, Tottenham and Liverpool "all refused to comment." Furious MPs and campaigners said that the arrangement -- which is "completely legal" -- was "utterly wrong." Tax Research UK Dir Richard Murphy said that it was "undoubtedly special treatment for high-earning footballers." Labour MP Margaret Hodge, the former chair of the Public Accounts Committee, added, "These kind of secret deals for the very wealthy are totally unjustifiable. They are the kind of thing that brings the whole tax system into disrepute." The new revelations "will also lead to fury" over HMRC’s apparent willingness to grant "sweetheart deals" for the richest individuals and businesses, while ordinary taxpayers "are hounded for every penny they owe." Daniel Geey, a specialist football lawyer and partner at Sheridans, said that the taxman "had struck the deal to try to curb the disproportionate amounts paid to players for their image rights" between '97 and '10. In '97, a tax tribunal had ruled that clubs could treat "image rights" payments differently to wages. Official sources insisted U.K. tax authority HMRC had "little choice but to allow the clubs to make use of image rights payments" due to the decision of the '97 tax tribunal (DAILY MAIL, 9/30).
