Tax havens scrutiny: will RL be outed? : Mon Mar 23, 2009 11:17 am  

Larry Elliott/Guardian wrote: Tax havens will be forced to submit themselves to international scrutiny under plans to tackle their culture of secrecy being proposed by Gordon Brown... [who] intends next week's G20 summit to discuss plans for a multilateral exchange of information on ‘offshore’ accounts. G20 finance ministers discussed a crackdown on tax havens at their talks last weekend and Brown has told Britain's international partners that he wants to... ‘make sure tax secrecy is a thing of the past’. Campaigners said the initiative was welcome but said much would depend on what tax havens would be forced to reveal. Under the current OECD plans, exchange of information is not automatic but relies on those making inquiries knowing full details of accounts and account holders. Britain says that a multilateral exchange of information system would be simpler to administer, more transparent and would provide minimum standards for all. Full story It’s no secret that professional clubs in various sports use (or previously used) offshore accounts; rugby league is no exception. An example of such usage is when a sports club recruits an overseas player, a significant portion of their salary goes into an ‘offshore’ account, which they recieve at the end of their contract as a lump sum. No doubt part of the attraction for overseas players to play abroad, in a competition perceived to be inferior. It also provides security for the club, knowing that if the player wants away early, he won’t receive said lump sum. Should rugby league, therefore, be concerned about Brown’s plans?

Larry Elliott/Guardian wrote: Tax havens will be forced to submit themselves to international scrutiny under plans to tackle their culture of secrecy being proposed by Gordon Brown... [who] intends next week's G20 summit to discuss plans for a multilateral exchange of information on ‘offshore’ accounts. G20 finance ministers discussed a crackdown on tax havens at their talks last weekend and Brown has told Britain's international partners that he wants to... ‘make sure tax secrecy is a thing of the past’. Campaigners said the initiative was welcome but said much would depend on what tax havens would be forced to reveal. Under the current OECD plans, exchange of information is not automatic but relies on those making inquiries knowing full details of accounts and account holders. Britain says that a multilateral exchange of information system would be simpler to administer, more transparent and would provide minimum standards for all. Full story It’s no secret that professional clubs in various sports use (or previously used) offshore accounts; rugby league is no exception. An example of such usage is when a sports club recruits an overseas player, a significant portion of their salary goes into an ‘offshore’ account, which they recieve at the end of their contract as a lump sum. No doubt part of the attraction for overseas players to play abroad, in a competition perceived to be inferior. It also provides security for the club, knowing that if the player wants away early, he won’t receive said lump sum. Should rugby league, therefore, be concerned about Brown’s plans?

: Mon Mar 23, 2009 11:27 am  

Ofshoring accounts is not a way to avoid paying tax

Tax is ALWAYS paid somewhere along the line.

It can, in certain circumstances, be a more efficient and completely legal way to maximise returns for higher rate tax payers.

This is, imo a smoke screen from Brown.

: Mon Mar 23, 2009 12:59 pm  

I was under the impression that these players were in part paid for their image rights which avoids PAYE!!

: Mon Mar 23, 2009 1:10 pm  

Eccleshill Rhino wrote:

I was under the impression that these players were in part paid for their image rights which avoids PAYE!!

As has been said, tax is not avoidable, they will always pay some, somewhere.

Now, if Gordon wants to start with his mates in the Lords, and on then to boards of big business, and get them payig the same tax as everyone else then I'll happily start to declare my income differently, until such a point, so long as my accountant saves me more tax than his fees, I'll keep it "efficient".

: Mon Mar 23, 2009 2:00 pm  

Code13 wrote:

Ofshoring accounts is not a way to avoid paying tax

Tax is ALWAYS paid somewhere along the line.

You are wrong, you know, although its gradually getting harder. Its usually down to the question of residence. As someone said later, more often than not though you get to pay local tax at a far lower rate than in your own jurisdiction.

: Mon Mar 23, 2009 2:03 pm  

Eccleshill Rhino wrote:

I was under the impression that these players were in part paid for their image rights which avoids PAYE!!

Still income in the hands of the recipient, and still taxable. Avoids NIC, I assume? And the biggest potential benefit to a club is that a player can receive income from a source that (if structured right) falls outside the salary cap.

: Mon Mar 23, 2009 2:09 pm  

Eccleshill Rhino wrote:

I was under the impression that these players were in part paid for their image rights which avoids PAYE!!

This is under review. I think with a southern IR office (posibly because it was first looked at in RU).

If clubs have paid players 'through image rights' they are going to kop it. If they have made a habit of it with some big contracts some clubs may have problems paying the IR.

: Mon Mar 23, 2009 3:16 pm  

Adeybull wrote:

You are wrong, you know, although its gradually getting harder. Its usually down to the question of residence. As someone said later, more often than not though you get to pay local tax at a far lower rate than in your own jurisdiction.

So they pay tax then, meaning I am right.

And given that players will be UK domiciled they will be paying UK tax, just not PAYE.

: Mon Mar 23, 2009 3:40 pm  

Code13 wrote:

So they pay tax then, meaning I am right.

And given that players will be UK domiciled they will be paying UK tax, just not PAYE.

What happens when the (usually overseas, since its them this primarily applies to) player is not UK domiciled? What happens if he organises his affairs such that he does not spend enough time in either UK or OZ (or wherever) to get caught under the relevant residency/domicile rules? What about the "Singapore Parachute" when funds are transferred when the player is in the air on his way back? For example?

And that's before we get into some of the murkier activities involving club owners or their pals paying money trough the back door into offshore accounts that people speculate about.