Taxman targets football transfers

FOOTBALL players who use agents to handle their transfers between clubs are to face a potentially huge tax bill following a crackdown by the Inland Revenue.

The tax authority has decided that players must pay tax on payments made to agents for work on their transfer deals. Although they do not receive the money, it is argued that the players benefit from the agents' work and so it represents a 'benefit in kind'.

With agents regularly receiving more than £1m for a successful transfer, this could leave players who are taxed at 40% having to pay up to £400,000 on the deal.

All Premiership and Football League clubs have been informed of the ruling. If they co-operate, the Inland Revenue will impose the tax only on future deals.