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Football: Government owed millions from stars

Ahead of tonight’s clash with Italy, STEVEN WALKER examines how the England squad have managed to avoid the taxman

When the England football team plays its first World Cup game tonight, thousands of young fans living in poverty will watch a group of men whose average earnings per week are around £150,000 play in an arena built by poverty wages and in a country with massive inequalities between rich and poor. 

Not only that but most of those England players have constructed elaborate tax-dodging schemes which means that they have cheated the Exchequer of money that could be used to reduce poverty.

In May, the Save the Children charity predicted that there will be five million children living in poverty by 2020 — the year when child poverty is meant to end according to The Child Poverty Act.

Save the Children figures take existing Institute for Fiscal Studies (IFS) projections of a third more children in poverty by 2020 and factor in planned welfare cuts, a calculation which it says could add 325,000 children to the IFS figure. Welfare spending cuts will exacerbate child poverty levels. 

Child poverty is also caused by low pay, and two-thirds of poor children now live in working households.

Meanwhile dozens of top footballers, including England players Wayne Rooney and Gareth Barry, are avoiding millions of pounds in tax. 

The Premier League footballers use complex tax avoidance schemes that legally allow them to pay as little as 2 per cent tax on some earnings. 

Rooney uses a device that enabled him to save nearly £600,000 over the past two years and the tax liability of Barry, of Manchester City, is £135,000 less than if he had been subject to income tax at 40 per cent. 

Daniel Sturridge of Liverpool uses a similar scheme. The scale of tax avoidance in football has become so great that HM Revenue & Customs is demanding a payment of £100m from clubs on behalf of their players. 

Last year other research found that apart from those players who are able to pay as little as 2 per cent, a further 55 Premiership players benefit from a tax saving of 22 per cent by receiving a substantial proportion of their total earnings via an image rights company. 

These include former England and Chelsea defender Ashley Cole, ex-Manchester United defender Rio Ferdinand and Michael Owen whose company Owen Promotions owns 11 racehorses. 

Arsenal’s Theo Walcott has TJW Promotions while David James, the former England goalkeeper, has Toocoo.

The players have two contracts with their clubs. They get a salary as a player and the other is for “image rights” — earnings from shirts and other merchandising. 

Naturally those shirts and the overpriced replicas so desirable to young fans are made in sweatshop conditions by young people who themselves are paid barely subsistence wages in some of the poorest countries in the world. 

Royalties earned for promotions, advertising and wearing famous name football boots are paid into a company which is only liable for 28 per cent corporation tax rather than the 50 per cent income tax.

The amount of money thrown at elite footballers is no guarantee of success either. The Guardian newspaper analysed the wages bill of top Premier League clubs and matched that against their final league position in 2012-13. 

This shows categorically that money does not buy success. For example, QPR had the worst performance compared to the size of its wages bill. Others spending for failure were Reading, Wigan, Sunderland, Aston Villa, Liverpool, Arsenal, Chelsea and Man City. 

Those clubs doing well and spending relatively less were West Ham, Swansea, West Brom, Everton and Spurs. 

QPR were also the biggest spender on wages as a proportion of club income, the lowest was Man United, bearing in mind that Man United’s income in 2012/13 was £363m while QPR had an income of £61m. 

Swansea were the outright value for money Premier League team with the best results per pound spent with a turnover of £67m and 73 per cent of this spent on players’ wages.

But success on the pitch is now secondary to the aspirations of the steady run of multi-billionaires buying Premiership clubs. 

The latest is the United States Shahid Khan, who has bought Fulham for a reported £200m. Manchester United, Liverpool, Arsenal, Aston Villa, Sunderland and now Fulham, bought by shrewd and calculating billionaires who see them as businesses — attracted by the huge money the Premier League makes selling its matches to Pay TV here and overseas. 

Other rich owners use income to leverage loans for other parts of their financial empires. Man United for example were bought with massive loans totalling £700m and still has one of the biggest debts in the Premiership of nearly £400m, while the US owners have moved the business to low-tax Nevada.

The money swilling around football is almost beyond comprehension, made worse by the millionaire lifestyles and boorish behaviour of players adored by young fans many of whom are living in poverty. 

A game invented by the working class has become another capitalist enterprise where the businessmen know the price of everything and the value of nothing.

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