Four tips to stop footballers scoring tax own goals – Tilney

Following the latest in a string of footballer tax scandals, Tilney's Adam Osper offers four tips to help other sports professionals avoid trouble with the taxman

Last week Brighton & Hove Albion striker Glenn Murray and his wife were arrested on suspicion of tax fraud. The couple were later released but HM Revenue & Customs (HMRC) said the investigations were ongoing.

Over the past year, an increasing number of players and ex-footballers have been identified as having been involved in aggressive tax-planning schemes, and in some cases this has led to huge fines and tax demands.

Tilney financial planner Adam Osper, who specialises in advising sports professionals, said most footballing clients come into wealth at a young age and have a relatively short career, and so careful financial planning is needed to ensure their money does not run out.

By some estimates, he adds, around three-fifths of former professional football players end up bankrupt once their playing careers are over.

“A high income leads to big tax bills and so it is all too easy to see why a young player, perhaps with limited financial experience, might get tempted by the allure of aggressive – and usually very complex – tax planning,” he added.

To counter this, Osper offers four tips for advisers to help footballers – and other professional sports people – to avoid scoring own goals.

Keep it simple

“Pay down your mortgage, own properties in rentable locations or where you plan to live post retirement and build up a pot of money in mainstream investments to give you financial independence when you retire. You only have five to 15 years to try and earn for a further 50 to 60.”

Stay away from complicated structures

“If you don’t understand what your adviser or accountant is telling you, how can you know what you’re letting yourself in for?” asks Osper.

He says he has seen footballers agree to invest in complex tax schemes without fully understanding the interest such schemes may pique in the authorities.

He continues: “The big problem here is that investigations can come several years later when players are at the end of their career and with advance payment notifications now in play, huge sums might have to be repaid for something that happened years ago that they can’t really remember, when they may have either spent their cash or it’s tied it up in illiquid assets.”

Get recommendations for a good adviser who is experienced in working with footballers.

“Often they put trust in the wrong people and sadly people look to take advantage,” he explains. “Some people may have limited sympathy as the footballers earn millions, but the reality is they are young people trusting professional advisers to give them good advice.”

Never get involved in get rich-quick schemes

Referring to the classic phrase “anything that sounds too good to be true probably is”, Osper says strong and stable planning should be preferred over chasing “10% returns”.

“I always make it known early in the relationship to run anything by me no matter what it is,” he continues. “If it’s good, I will tell you – if it’s not, I will also tell you.

“Keep things simple so you don’t need to take risk with your money as you earn enough. Enjoy your life, but always have one eye on the future as your career may be over soon.”