England players embroiled in a dispute with the FA over tax payments as Gareth Southgate’s stars are told to suck it up after losing out… with bonus package for reaching Euro 2020 final slashed by £2.5MILLION
- England players are frustrated after a row with the FA regarding tax payments
- Their bonus for reaching the Euro 2020 final was slashed from £7.8m to £5.25m
- Situation could jeopardise now contract for commercial and sponsorship work
- Squad were expecting to get £300,000 each but instead received £200,000
England’s Euro 2020 finalists have been told to ‘suck it up’ after being left short-changed, as a row over pay threatens to engulf their World Cup build-up.
It has been revealed Football Association officials were forced to make an embarrassing adjustment to the way they pay the squad, on the advice of the tax authorities.
A source close to the players said they were not impressed by the way the FA have handled a situation which could jeopardise a new contract with the squad for commercial and sponsorship work.
England players have been left frustrated after a dispute with the FA regarding 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
‘This is all part of a general HMRC crackdown on paying the right amount of tax to one-man companies,’ said tax expert and former Leeds chairman Gerald Krasner.
‘It is happening across the board, not just in football. The players will have to suck it up.’
Under a system agreed before Euro 2020, bonuses were subject to Corporation Tax at 19 per cent because they were deemed to be commercial payments.
It was thought fair to treat the money as commercial payment because it is sourced through the same FA cash pot as England’s sponsorship deals. However, HMRC said the money should be paid directly to players and not via image-rights firms, making it subject to the 45 per cent top rate of tax.
A source close to the players said: ‘They are not being unreasonable. Their income comes from the FA’s sponsorship revenues, so it should be treated as commercial income. A number of players are not impressed with the FA and how the whole thing has been handled here.’
The row could jeopardise a new contract with the squad for commercial and sponsorship work
The change to England player pay comes as the FA attempt to agree a new contract with the squad for future commercial and sponsorship work.
FA chiefs want an agreement signed off at the international break in November.
However, that is thought to be unlikely, due to the concerns a number of players have over pay, tax and the amount of time they will be required to spend on promotional work.
The source added: ‘The FA plan to get this agreement signed in the November break, but it is doubtful unless the players receive reassurances.
‘If not, they could refrain from doing any commercial activity for the World Cup.’
Players have concerns over pay, tax and the amount of time required for 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.
Under the terms of the loan to help the FA mitigate the pandemic’s impact, the governing body were prohibited from paying any bonuses or dividends until the debt had been repaid.
The FA would not comment on the matter.