SE64110 - Tax treatment of Association footballers: signing-on fees

Signing-on fees are sometimes paid

• when a player first becomes a contract player or
• when a player is transferred from one club to another.

These payments are usually chargeable to tax under Schedule E as emoluments from employment (see generally SE00510 onwards). Often the payment will be included in the player's contract, and will be payable by instalments over the term of the contract.

If a signing-on fee is paid "for loss of amateur status" when a player first becomes a contract player it might be argued that it is not taxable (following Jarrold v Boustead (41TC701) - see SE00710). If such an argument is pressed submit the case to Employment Income Technical after obtaining all the contracts and the full facts.

Where a player is transferred from one club to another, he may in certain circumstances receive signing on fees from both clubs. It should be noted (following Shilton v Wilmshurst, (64TC78)) that both payments will represent emoluments from his employment with the new club even though the old club will no longer have an interest in his performance (see SE00700).

Any claim that the transfer payment from the old club is not a taxable signing on fee, should be referred to Employment Income Technical for advice.