Premier League Clubs Braced for Higher Wage Bills After Tax Overhaul
The UK government has unveiled a significant shift in tax policy that will directly impact the finances of Premier League football clubs and their players. Announced in the recent budget, from April 2027, payments for image rights will be treated as income rather than corporate revenue, subjecting them to the top income tax rate.
The Financial Impact on Players and Clubs
This change means that the substantial image rights payments many players receive—often channelled through limited companies for commercial earnings like sponsorship and advertising—will now be taxed at 45%. This is a sharp increase from the current corporate tax rate of 25% applied to such payments. The result will be significantly larger tax bills for many top-flight footballers.
Agents and financial experts warn that this increased financial burden is likely to be passed directly on to the clubs. This is especially true for players signing new contracts before the 2027 deadline. It is understood that some players signed from overseas already have clauses in their contracts that make their clubs liable for any major changes to the UK tax regime.
Contract Negotiations and Long-Term Consequences
The trend of negotiating contracts based on net pay, where clubs manage the players' tax affairs, is expected to continue and intensify. Given that image rights can legally constitute up to 20% of a player's total earnings if deemed commercially realistic by HMRC, the potential additional tax liability for clubs could be considerable.
Professor Rob Wilson, head of finance, accounting and business systems at Sheffield Hallam University, commented on the move: "With these changes, the government is ensuring remuneration reflects fair taxation, and giving a clearer picture of the wage bills driving financial sustainability debates in English football. There will be some short-term pain as clubs adjust, but in the long run this promotes greater integrity, accountability and confidence in the economics of the game."
This latest measure is part of a long-running clampdown by HMRC on footballers' earnings, which has already recovered hundreds of millions of pounds in unpaid tax. The new rules will force a recalibration of financial planning for both players and clubs across the Premier League.
