EIM64120 - Tax treatment of rugby and soccer players: benefit matches
Players are sometimes granted benefit matches and receive the
proceeds personally. In considering the taxation of such proceeds
the usual factors relevant to deciding whether a sum is earnings
from employment apply (see
EIM00600 onwards). The circumstances in
which gifts are assessable under Section 62 ITEPA 2003 are dealt
with at
EIM01450.
Where the player's club grants the benefit after a set
qualifying period of service the proceeds are taxable under Section
62 ITEPA 2003 whatever the arrangements for staging the match are.
The agreement to do so may not be recorded in the written contract
and it is therefore necessary to specifically enquire about any
agreement, whether written or verbal, which exists outside the main
contract.
Where there is no entitlement to the benefit (see
EIM00630) and no custom exists in
respect of it (see
EIM00640) then the proceeds are not
within Section 62 ITEPA 2003. This will usually be the case where
the match is organised by a testimonial committee independent of
the club. However, you should not agree that the proceeds of a
benefit match escape liability simply because such a committee
exists. You must first establish the full facts and apply the
principles outlined above.
Relevant tax cases are:
- Reed v Seymour (11TC625)
- Davis v Harrison (11TC707)
- Corbett v Duff (23TC763)
- Moorhouse v Dooland (36TC1)
- Moore v Griffiths (48TC338).
Do not overlook the possibility that the benefit may be
connected with the termination of employment so that Section 401
ITEPA 2003 applies (see
EIM13000 onwards).
Increasingly, a benefit takes the form of a benefit year and
events are staged, usually by an independent testimonial committee,
for the player's benefit. The committee will be an unincorporated
association chargeable to corporation tax and its income must be
considered under Corporation Tax rules.
