I was more concerned about law suits arising from an earlier claim that you WERE Orford.

By that I obviously mean law suits from Orford at being called an accountant...

Given HMRC's attention to the image rights situation and the fact that Hull last year reached an accommodation with HMRC over EBT payments (something that has yet to bite the backsides of other clubs), I seriously doubt that there'll be any dodgy 3rd party deals involved in Ellis's signing

Hi mate, good to see you over this way. I presume the Sin Bin is as open-minded and objective as ever?

I'd guarantee there will be no dodgy deals regarding club-paid image rights, and I suspect Pearson would sack on the spot anyone who even mentioned EBTs, after the situation he inherited from Darth's missus.

The HMRC action relates to payments by the clubs though - payments that HMRC contends (with justification, IMO) were salary by another name. They were not targeting clubs regarding payments for image rights by unconnected third parties though - that is a tax issue between the company making the payments, the player's offshore (inevitably) personal service company and HMRC. In the same way, let us suppose an unconnected third party gave the player's partner a job on good money, that she (is it ever a he...???) would have been uinlikely to get otherwise? The club will argue it has no involvement there. Of course, if people chose to speculate that a club's wealthy owner had done a deal with his mate to make such payments, and in turn be seen right by the owner in other ways, well that would of course be pure speculation.

Bulls have stated categorically that they never ever used EBTS, so the club is not exposed regarding that particular device. And I'm relieved at that, since IMO EBTs were a very very flagrant example of where tax avoidance crosses the line into tax evasion. Not sure which other clubs used them, although I recall seeing Leeds acknowledge an exposure a bit ago. The exposure is for club-paid image rights (as with all other clubs apart from those like Wakefield that are new phoenix entities after the original entity went tìts-up) and (and I suspect more than a bit unfairly) pension scheme payments.

Say hello from me to those open-minded objective souls in the SB next time you are there...

Probably nothing illegal tax-wise, provided the paying party can demonstrate it is a valid business expense.

What it DOES do is provide a means of driving coach and horses through the salary cap. Hence the speculation as to how some clubs seem able to retain a (clearly) far more capable squad than others, for supposedly the same maximum spend.

As for the example you quoted, paying a "wife's wage" is quite normal for small businesses where the wife or partner does not otherwise work or have income. No different to higher-rate taxpayers putting savings in the wife's name or sharing assets to minimise IHT. As long as the wife can be shown to do something for the business - even if its just answering the telephone at home. Nowdays, though, most such wifes have to work anyway. And the benefits in kind dodge with cars etc has been pretty well history for ages, as the personal allowance increased and the P11D theshold for benefits in kind becoming taxable has been frozen for years.

But the "wifes wage + benefits" avoidance mechanism saves at the very very most £4,420 in tax per annum. By contrast, if you happened to be a non-dom marquee rugby player, whose offshore personal services company is paid £150k p.a. for the player's image rights by an "unconnected" third party and you just happen to need a lower salary from the club as a result, the tax saving per annum is £162,500 - and the club saves £41k in NIC as well.

Do you have many friends?

As you were...

Very interesting. Didn't you explain recently that as a result of recent cases HMRC was limiting such deals to 33% of salary? In which case wouldn't the figures be lower?

Don't think it was me said that?

What I WAS given to understand was that HMRC and the RFL had seemingly agreed that a maximum of 15% of a player's package - as paid by the club - could be taken in the form of image rights. But I've not yet seen any independent verification of that limit, nor do I know whether higher limits can be allowed for "marquee" players, so treat that with a bit of caution.

But that is for club-paid image rights. I'm wittering on about image rights paid by ("unconnected"icon_wink.gif third parties. The best-known such examples in recent years were Scully and Gillette, and Harris (at leeds) with Tissot. We had Harris and Publico (although as part of the Harrisgate wars it was seemingly ruled that Publico were NOT "unconnected" hence the third party-paid image rights were retrospectively brought into the cap and hence our breach), and (for example) I did note at the time how it was curious that Sam was unveiled as the new face of Lexus Bradford ("unconnected" with the club) the day before his upgraded package with the club was announced in the media.

Don't think anyone would argue that Scully's deal appeared to be genuine third-party, providing value for the payer. We all saw a load of use of his image in the media. Superb bit of business by the Saints club, I'd say. If it had instead been with say Joe Bloggs cowboy building services, and you never saw any real evidence of JBCBS using the player in their marketing etc, then you might wonder why an "unconnected" third party would shell out so much?

The Gillette thing with Scully may be one of those rare things, though, a genuine unconnected deal negotiated maybe by him and his agent rather than theclub; for example if he'd moved to 9say) Leeds or Warrington, would his deal with Gillette have been affected in any way? I doubt it. Put another way, is there any obvious reason why St Helens would or even might have been paying Scully a lower wage, by reason of the Gillette deal? I find it hard to think that Gillette would pay over and above the going rate to him, to save Saints money?

Perhaps the question, "Would the deal likely continue uninterrupted upon a player transfer?" might often resolve the "unconnected" question.

Do you think that all the brave talk about clamping down on tax avoidance scams may turn out to have an impact on RL? I am no expert, but given that these deals almost always seem to involve overseas stars, I don't see it. And yet . . . by analogy of the government's stated intention to void scams like evading stamp duty by owning shares in a company that owns a house, rather than owning a house, would they not also be able to say no, payments for services to some offshore company look feel and smell more like PAYE wages and so you (the club) will be taxed as such?

Or is it all just hot air?

I thought the 15% figure quoted was the deal done by the [iRFU[/i to make the treasury go away.

The RFL has yet to arrange a deal though is hoping for similar.

Of course in football - that is where the big money & taxes are. Although the marketing exposure is correspondingly higher.

Would anyone argue against (for example) Beckham having 75% of his wage as image rights?

I understood the RFL and HMRC had reached an over-arching deal - along the same lines. The two-men-in-a-shed in Solihull HMRC men were now going round each club in turn sorting out the bill. when I asked the question at the last fans' forum, PH said confirmed this and said they had not got to Bradford yet.

Beckham was actually the subject of THE image rights test case, in (around) 2002 IIRC. He won. HMRC has been seeking to mitigate the effects of that ever since.

Cheers for that.

Scully/Gillette may have been. We'll never really get to know the extent to which the club organised or brokered the deal, relative to how much the player's agent did. Personally, I have always assumed that club and agent work together on things like this, but that can only be an opinion.

Its different in the NRL, it seems. Witness the recent hoo-ha about Cherry-Evans. His club is up to the cap so stated publically it was desperately seeking third-party income to improve his package. IIRC in the NRL third party-paid image rights is a far more open subject - and IIRC there is a cap on the total amount! Summat like AUD 0.5m rang a bell, I think per player but I could be wrong? Wasn't exceedintg THIS cap one of the things that Storm and (earlier) the Doggies got done for? All a bit hazy memory, so I'd appreciate it if someone could improve on that.

IMO THAT is what we should have here though. Then at least we could have a bit more transparency about how some clubs were seemingly getting more bang for their bucks?

As for the impact already of anti-avoidance/evasion actions by HMRC - no, its not hot air at all.. The impact has already been very very real. For example, IIRC EBTs have been largely disallowed as a vehicle, as have some of the pension vehicles that were used for overseas players. And, if I am right, HMRC have already capped what club-paid image rights are allowable - and in any case, my understanding was that the RFL had anyway taken steps regarding regsistering new contracts with image rights clauses (as in...they were refusing to do so at one time until all this mess was sorted out). But, as I said, there is not a lot HMRC can do if (say) an overseas business pays (for example) a substantial sum to a non-dom player's bermudan-domiciled personal services company for "services rendered", or if (say) a UK business paid a player's partner £50k for "services rendered".