🔗 Share this article

English top-flight clubs are facing the prospect of higher wage bills following the government’s announcement in the financial plan that image rights payments will be classified as income from April 2027.

This adjustment will result in many elite footballers with substantially higher tax bills, and a number of representatives have said that these costs are expected to be transferred to teams, especially for players who sign new contracts before the measure takes effect.

Grasping the Consequences of Image Rights Taxation

Numerous footballers receive branding income directed to limited companies for commercial earnings, such as endorsement agreements and advertising income. Starting in 2027, these will be subject to the highest band of income tax, rather than the company tax level of 25%.

Certain top-division athletes signed from overseas are understood to have clauses in their contracts that hold their teams responsible for any major alterations to the UK’s tax regime, but players without such terms are expected to request increased pay.

Deal Discussions and Monetary Consequences

Many players negotiate contracts based on net pay, with clubs managing their tax affairs, a trend expected to persist. Image rights payments often make up a substantial part of footballers' earnings, which is permitted by HMRC if the sum is considered commercially realistic and remains below 20% of total earnings, so the increased tax liability for teams may be significant.

“With these changes, the government is ensuring compensation aligns with equitable tax treatment, and providing a more transparent view of the salary expenditures fueling economic viability discussions in English football. There will be some short-term pain as teams adapt, but in the long run this promotes greater honesty, responsibility and trust in the financial aspects of the game.”

Government’s Move and Past Background

This official step follows a extended crackdown by the tax office on footballers’ earnings, which has recouped hundreds of millions of pounds in outstanding taxation.

• Image rights payments will be treated as personal earnings from 2027 onwards.
• Players may seek higher wages to compensate for growing tax costs.
• Teams face potential rises in salary outlays as a result.
• The change aims to ensure fairer taxation for top-paid footballers.