🔗 Share this article Higher Taxation Costs for Players Could Spark Requests for Higher Wages from Clubs English top-flight clubs are confronting the possibility of increased salary costs after the official declaration in the budget that image rights payments will be classified as earnings from April 2027. The change will leave many top-flight players with significantly larger taxation expenses, and several agents have indicated that this is likely to be passed on to clubs, especially for athletes who agree to fresh deals before the policy is implemented. Grasping the Impact of Image Rights Tax Changes Many players obtain image rights paid to limited companies for business revenues, such as sponsorship deals and promotional earnings. From April 2027, these will be liable for the highest band of income tax, rather than the corporate tax rate of 25%. Certain top-division athletes signed from overseas are understood to have stipulations in their agreements that make their clubs liable for any major alterations to the UK’s tax regime, but players without such terms are likely to demand higher wages. Deal Discussions and Financial Implications A significant number of athletes arrange deals based on take-home earnings, with clubs managing their tax affairs, a practice expected to persist. Image rights payments often make up a notable portion of players’ salaries, which is permitted by HMRC if the sum is considered commercially realistic and remains below 20% of total earnings, so the higher tax burden for clubs may be considerable. “Under this new policy, the government is ensuring compensation aligns with equitable tax treatment, and giving a more transparent view of the salary expenditures driving economic viability discussions in English football. There will be some immediate challenges as teams adapt, but in the future this encourages greater integrity, accountability and confidence in the financial aspects of the sport.” Official Action and Historical Context This official step follows a long-running clampdown by the tax office on players' income, which has recovered vast sums of money in outstanding taxation. Image rights payments will be taxed as income from April 2027. Players could demand increased salaries to offset growing tax costs. Clubs face potential rises in salary outlays as a consequence. The adjustment aims to ensure more equitable tax treatment for high-earning players.