Many sports clubs aren’t taking advantage of tax-free benefits when acquiring players.
And, according to Gareth Short, a partner in Birmingham-based BTG Tax, part of the Begbies Traynor group, the concession applies whether the newcomers are based in the UK or overseas.
Removal expenses of up to £8,000 can be provided before liability to income tax.
“In order to qualify the player will need to have changed his or her residence and the reimbursed costs must have been made before the end of the tax year following that in which the relocation occurred,” said Mr Short.
“Most of the traditional moving costs are covered by this relief, for example, the removal of goods and professional fees. But other expenses incurred are also allowable, including stamp duty and penalties for early repayment of loans.
“However, not all relocation expenses are allowable. Any reimbursement for loss on the sale of a house or car will not be covered, and nor will the purchase of new household goods.”
Nevertheless, suggested Mr Short, it doesn’t necessarily end there.
He said: “If the relocation costs are in excess of £8,000, consideration should be given to whether any can be covered by the travel and subsistence expenses rules or international travel deductions relief in priority to relocation relief.
“In addition, when a player is relocating to the UK for less than two years from the European Economic Area, or from one of the countries with which the UK has a reciprocal social security agreement, a Certificate of Coverage should be considered, meaning the player will not be required to pay employees’ National Insurance contributions while plying their trade in the UK. This certificate will need to be applied for in the player’s home country.
“These reliefs are available to all UK businesses and can be critical in obtaining a key employee. Taking proactive and specialist tax planning advice can significantly reduce the cost to an employer.”
