SE64120 - Tax treatment of Association and Rugby footballers: "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 an emolument from employment apply (see
SE00600 onwards). The circumstances in
which “gifts” are assessable under Section 19(1)1 ICTA
1988 are dealt with at
SE01450.
Where the player's club grants the benefit after a set
qualifying period of service the proceeds are taxable under S19(1)1
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
SE00630) and no custom exists in respect
of it (see
SE00640) then the proceeds are not within
Section 19(1)1. 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 fact that the benefit may be connected with
the termination of employment so that Section 148 applies (see
SE13000 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 CT rules. For example any interest income will be chargeable
to CT under Case III Schedule D. An FT Inspector must consider
these aspects of a benefit year.
