England’s Euro 2020 Finalists were told to “suckit up” after being left out of the race. A dispute over pay threatens their World Cup build-up.
Officials of the Football Association were forced to make a shocking adjustment to how they pay the squad on the advice from tax authorities.
Sources close to the players stated that they were not impressed with the FA’s handling of a situation that could lead to a new contract for sponsorship and commercial work.
England players were frustrated by a dispute between the FA and tax payments
Harry Kane and the squad had been promised a package of £7.8m for reaching the Euros final
Captain Harry Kane and the squad had been promised a Euro 2020 bonus package of £7.8million for reaching the final.
Not only did they miss out on the big football prize when they suffered a heartbreaking defeat by the Italians, they also saw the bonus slashed to £5.25m.
The squad, who had pledged to donate the cash to NHS charities if they won the tournament in the summer, were expecting to receive £300,000 each but instead pocketed £200,000.
FA officials made the adjustment after being advised by HM Revenue & Customs they had to pay a higher rate of tax on those bonuses.
Much to the frustration of the England players, the bonus was slashed to £5.25million
Gerald Krasner (ex-Leeds chairman) said, “This is all part a general HMRC Crackdown on Paying the Right Tax to One-Man Companies.”
It is happening all over the board, not just in football. It will be up to the players to take it all in.
In accordance with Euro 2020, bonuses were subjected to Corporation Tax at 19% because they were considered commercial payments.
Because the money was sourced from the same FA cash pot that England’s sponsorship deals, it was considered fair to consider the money commercial payment. HMRC stated that the money should be paid directly by players and not through image-rights companies, which would make it subject to the top rate of 45 percent tax.
Sources close to the players stated that they are not unreasonable. Their income comes mainly from sponsorship revenues. It should therefore be treated as commercial income. Many players aren’t impressed with the FA’s handling of the whole thing.
A new sponsorship and commercial contract could be at risk due to the row
The FA is trying to reach an agreement with the squad to continue commercial and sponsorship work.
FA chiefs desire an agreement to be signed off at November’s international break.
However, this is unlikely due to concerns that players have about pay, tax and the time they will need to spend on promotions.
Sources added that the FA planned to sign the agreement in November break. However, it is unlikely unless the players are reassured.
“If they don’t, they could not engage in any commercial activity related to the World Cup.”
Players have concerns about the pay, tax and time required to do promotional work.
The squad had to wait for their Euro bonus until the FA received their tournament payments in full from UEFA and had repaid a £175m Bank of England loan.
The FA recently received the final instalment of the £21.33m owed by UEFA and repaid the loan in full last month.
The terms of the loan to the FA to mitigate the pandemic’s effects, the governing body were forbidden from paying bonuses or dividends until the debt was repaid.
The FA did not comment on the matter.