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cambgull wrote:I thought most clubs pay big players tax?

It depends on what you mean by Clubs paying big players Taxes.
In Tax Law. Any company employing a player will have to deduct tax from their pay as an unpaid tax collector. This is the norm.
But if your alluding to the player getting his full share without deductions and the club paying his tax bill as an added bonus. This creats a problem.
A player signs a contract for a term agreed at a salary agreed. The club cannot therefor pay an amounf in adition and above that contracted amount as the tax for that payers Salary. That would be additional benifit in kind. and itself would also attract tax as it is deemed part of his Salary. i.e. A player is contracted to play for the next 2 years as a salary of £5,200.000 per year. ie £100.000 a week. The tax would be calculated on that £100,000. so he would get the relevant tax deducted for that amount only. Allowing for his personal allowance of course.
If the club paid that player the full £100.00 a week without deducting tax and NI and then paid an additional payment to the tax man to cover the tax that he would have paid on the £100.000 a week. then the wage bill would be the full payment plus the £100.00 plus the tax bill and his contract would have to allow for that so in reality his contracted payment would be for £11,000,000 as the tax would be 45% plus 11% for NI as there is now no upper limit. Phew that took some working out.
Trust me I know!
It's very big money but that's what we are dealing with nowadays. thank goodness Plainmoor isn't in that league.

Glostergull wrote: It depends on what you mean by Clubs paying big players Taxes.
In Tax Law. Any company employing a player will have to deduct tax from their pay as an unpaid tax collector. This is the norm.
But if your alluding to the player getting his full share without deductions and the club paying his tax bill as an added bonus. This creats a problem.
A player signs a contract for a term agreed at a salary agreed. The club cannot therefor pay an amounf in adition and above that contracted amount as the tax for that payers Salary. That would be additional benifit in kind. and itself would also attract tax as it is deemed part of his Salary. i.e. A player is contracted to play for the next 2 years as a salary of £5,200.000 per year. ie £100.000 a week. The tax would be calculated on that £100,000. so he would get the relevant tax deducted for that amount only. Allowing for his personal allowance of course.
If the club paid that player the full £100.00 a week without deducting tax and NI and then paid an additional payment to the tax man to cover the tax that he would have paid on the £100.000 a week. then the wage bill would be the full payment plus the £100.00 plus the tax bill and his contract would have to allow for that so in reality his contracted payment would be for £11,000,000 as the tax would be 45% plus 11% for NI as there is now no upper limit. Phew that took some working out.
Trust me I know!
It's very big money but that's what we are dealing with nowadays. thank goodness Plainmoor isn't in that league.

Not bad Gloster
Couple of points
As he earns so much he wouldn't get any personal allowance
NI is 12 % up to £817 per week and 2% on everything above
He could be paid on what is known as a FOT basis(free of tax). This basically means that the employer has agreed in the contract to pay him for example £100k per week 'take home' and the employer pays the tax/NI . What this would mean is that the true gross pay would be nearer £208k per week(50% tax/2% NI)
Of course as has been stated alot of players have companies set up to avoid paying this sort of tax and end up paying very little like Jimmy Carr by using various schemes not available to us mere mortals
Getting back on to the point of agents I understand that Eunans agent insisted on the £175k clause, Torquay wanted more but had to agree or let Eunan walk last year when his contract ran out. Also it is obviously in the agents interest to get the the player to move so that he can get his commission as he earns very little if the player stays.

Eunan couldn't and wouldn't have walked, we'd have made him an offer, if he didn't accept it and clubs wanted him then it would have gone before a tribunal if terms weren't agreeable to the club. Does anyone realistically think we'd have been worse off financially if we'd refused to cave in?

His new contract brought a hefty pay increase and at the time he was barely known outside Plainmoor so I doubt there would have been too many takers, let's face it, only Swindon and Crawley have made firm approaches after he had a fantastic season overall. £175k was a ridiculously low valuation to put on him and Bill Rogers should have been a lot tougher during the negotiations IMHO.

Southampton Gull wrote:

£175k was a ridiculously low valuation to put on him and Bill Rogers should have been a lot tougher during the negotiations IMHO.

That's a big ask though, given that he expired 8 years ago!!! o:)

You know who I meant lol.

My only excuse is that it was early and I'd been up late the night before. Oops.