Taxman supporting Man United at Wembley
442 Staff - Wednesday 25 May 2011, 15:16
Calculations by PKF Accountants and business advisers suggest that Chancellor George Osborne has had a lucky break as, by reaching the Champions League Final at Wembley, Manchester United have already saved the Exchequer an estimated £1.25 million.
If Sir Alex Ferguson's side prevail against Barcelona on Saturday, that will be boosted by a further £750,000, earning the taxman nearly £2 million.
This is because the government generously decided to offer a complete tax exemption to overseas football teams playing in the Wembley showpiece, but did not extend this to British clubs or to other foreign sports stars.
Lionel Messi and his Barcelona team-mates earn a salary on average of almost £5 million-a-year and will possibly more than double that with sponsorship.
Therefore, without the exemption, each player would have had to pay UK tax on as much as £250,000 of income.
"The highly paid stars of Barcelona will get a windfall this weekend as their pay will be free of UK tax, while our local heroes face a significant tax bill," said Philip Fisher, Head of Employment Tax and Rewards at PKF.
"With prize money of €9 million (£7.9 million) for the winners and €5.6 million (£4.9 million) for the runners-up the taxman will certainly be supporting Manchester United.
"If only Arsenal or Spurs had made it to Wembley instead of Barcelona, the exemption wouldn't have cost us a penny."