Footballers face 50% tax rate

As a huge football fan, I couldn’t let this slip:

With such an ailing budget, the UK government has found a way to substantially boost its tax collections: by increasing the taxes paid by footballers.  Raising it to 50%, players like Cristiano Ronaldo who is reported to be earning as much as £125,000 a week could pay an extra of as much as £670,000 a year, a 19% increase. The Financial Times is reporting that many of the players fall under the £50,000-£70,000 a week bracket, amounting to an extra £320,000 for the players at the top end of this range.

This idea is primarily contentious on the point that it becomes harder (and definitely more expensive) to attract and maintain top talents.  For the football clubs, solution lies on higher wages.

An insider at another leading club said the implications were a higher wage bill or a reduction in the ability to attract top talent, or both.

High wages are part of a virtuous circle for the league. By attracting the best players in the world, clubs command more lucrative media rights. These help to raise brand value and in turn attract wealthy foreign owners, who invest more in players.

A likeable set of graphs from the FT:

footballtax

I could only think of the implications: the smaller clubs will become even more marginalized as they struggle even more to improve their set of players while those who have the money can easily pay so much more for the better players.  If the solution is to pay higher wages, I’m not sure how the lower leagues could improve their status or attractiveness at the very least as the cheaper, more affordable players are the only ones they get. Of course, that’s not to say that all ‘cheap’ players are horrible players. But you get my point.

Source: FT

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