🔗 Share this article Increased Taxation Costs for Footballers May Lead to Demands for Higher Wages from Clubs English top-flight clubs are facing the prospect of increased salary costs following the government’s announcement in the financial plan that image rights payments will be classified as income from April 2027. This adjustment will leave many elite footballers with significantly larger tax bills, and a number of representatives have indicated that this is likely to be passed on to clubs, particularly for players who agree to fresh deals before the policy is implemented. Understanding the Consequences of Image Rights Taxation Numerous footballers obtain image rights paid to limited companies for business revenues, such as sponsorship deals and advertising income. Starting in 2027, these will be liable for the 45% top rate of personal taxation, rather than the company tax level of 25 percent. Certain top-division athletes recruited internationally are believed to include clauses in their contracts that hold their teams responsible for any major alterations to the UK’s tax regime, but players without such terms are expected to request higher wages. Deal Discussions and Monetary Consequences A significant number of athletes arrange deals based on net pay, with clubs taking care of their tax affairs, a trend expected to persist. Branding income often make up a substantial part of players’ salaries, which is permitted by the tax authority if the sum is considered commercially realistic and remains below 20 percent of overall income, so the higher tax burden for teams may be significant. “Under this new policy, the government is ensuring compensation reflects fair taxation, and giving a clearer picture of the wage bills driving financial sustainability debates in English football. There will be some short-term pain as teams adapt, but in the future this encourages greater integrity, responsibility and trust in the financial aspects of the sport.” Official Action and Past Background The government’s move comes after a extended crackdown by HMRC on players' income, which has recovered hundreds of millions of pounds in unpaid tax. Personal branding income will be taxed as income from 2027 onwards. Athletes could demand higher wages to offset rising tax bills. Clubs confront potential rises in salary outlays as a consequence. The change aims to ensure fairer taxation for high-earning players.