HMRC coming for footballers and will scour Instagram for tax intel
Buried away in the documents released alongside the Budget was a new report published by HMRC that reveals sports professionals and those involved in professional football such as players and agents are to become even more of a focus area for the Treasury.
Coupled with the Chancellor’s announcement of new investment in HMRC compliance activity which will see a further 670 compliance officers recruited by 2029-30, on top of the 5,500 previously announced, it paints a very clear picture.
More compliance staff will mean HMRC is able to widen the net and spend more time poring over taxpayers affairs, looking at more players and possibly reaching down to more divisions below the Premier League.
There has already been a notable increase in HMRC compliance activity in sports in general, including not just football but also motorsport, boxing and other individual sports such as tennis and golf. But the announcements this week signal that this scrutiny is likely to increase over the next few years.
Major risk area for HMRC
Football specifically is seen as a major risk area for HMRC, and the new report on modernising the approach to “wealthy taxpayers”, defined as those with income over £200,000 or assets of over £2m, means that more of the UK’s top sports professionals could face more investigations from the revenue.
The small print also shows that HMRC will collate information from open sources. It is already common practice to use news articles and press interviews against taxpayers when their words conflict with tax statements.
However, high-profile people, such as footballers, face their social media channels increasingly being checked by HMRC, where careless posts or even words could well lead to misunderstandings or challenges.
Additionally, there will be more pooling of resources and collating additional information on this group of taxpayers to ensure greater tax compliance. In football, this is likely to mean bringing together those with knowledge of clubs’ and agents’ affairs, for example, with those focused on individual players.
Taxed on your reel?
Given greater global tax transparency we also expect HMRC to bring in information received from other jurisdictions on players’ affairs which will result in much more involved, and potentially expensive, compliance checks for them and indeed other sportspeople.
The message from HMRC is clear: there are fewer and fewer places to hide. However, this approach brings risks for the tax authority itself. Given the financial and emotional toll of tax enquiries, HMRC must ensure the information collated, such as social media posts, is used in a targeted and carefully considered way.
Investment in HMRC compliance activity – and potentially a more targeted approach – is to be welcomed. However, the key for HMRC is ensuring that the new officers are well-trained and that the information gathered is considered carefully and rigorously before opening potentially disruptive probes into high-profile taxpayers’ affairs.
Alistair Culverwell is head of tax dispute resolution at Forvis Mazars