You’ve probably just settled your January tax bill after completing your self-assessment tax return.

As a professional footballer, taxes are an inevitable part of your career. However, seeing the final amount owed can still serve as an unpleasant reminder of the financial burden.

You may have paid tax on benefits provided by your club, as outlined on your P11D form. Agent fees, in particular, can significantly increase your liability, sometimes reaching tens of thousands of pounds.

Read on to learn more about the taxable benefits listed on your P11D form, how they work, why they’re important, and steps you can take to lower your tax bill.

 

Declaring Your Taxable Benefits

The benefits listed on your P11D form may have contributed significantly to your tax bill.

A P11D is a tax form completed by employers to detail any expenses and benefits provided to their employees.

As a professional footballer, this form is prepared by your club, outlining any expenses and benefits you’ve received in your role as an employee.

Each year, your club submits the P11D to HM Revenue & Customs (HMRC) by the 6th of July deadline.

You likely received your copy in July, which detailed the benefits provided and the corresponding tax owed. You would have then settled the resulting tax bill by 31 January.

 

Taxable Benefits to Consider

Each year, your club may provide various expenses and benefits that must be reported on a P11D form. While some players assume these benefits are tax-free, many are, in fact, taxable.

Common examples include:

• Agent fees: Often paid directly by your club on your behalf.
• Insurance: Such as sports injury cover, which your agent may have arranged as part of your contract.
• Accommodation: This could be a living allowance or a contribution toward rent, particularly helpful if you’re relocating or an overseas player.

While it’s beneficial for your club to cover these costs, leaving you responsible only for the tax rather than the full amount, it can still be surprising to see your tax liability on the P11D in July if you’re not prepared.

 

Club-Funded Agent Fees and Their Tax Implications

Agent fees can lead to a particularly substantial tax bill. Here is a simplistic breakdown:

• A player agrees to pay their agent 5% of their wages under a representation contract.
• The agent negotiates a deal with the club for £20,000 per week, equating to circa £1 million per year.
• The agent’s fee comes to £50,000, which the club agrees to pay on the player’s behalf.
• While the player avoids paying the agent directly, this arrangement counts as a “benefit in kind,” meaning they owe tax on it.

In the recent past, the club and player would often report this to HMRC as a shared payment under a dual representation contract; an additional contract whereby the agent is deemed to be acting for both player and club. This allowed the player to only pay additional-rate Income Tax (45%) on half the agent’s fee, resulting in a P11D benefit in kind of £25,000, leading to a tax bill of £11,250.

However, HMRC has recently been attacking these arrangements, requiring the tax paid to align with the terms of the player’s representation contract. In this case, the full 5% agent fee results in a £22,500 tax bill on the P11D—a doubling of the previous liability. The interpretation of the arrangements is potentially subject to challenge if the agent can prove he has acted for the club with evidence on a proportional basis. In principle, however, the tax burden for players can end up being more significant.

It’s, therefore, crucial to plan ahead and understand the tax obligations you may face in January to better manage your finances. You agent should make you aware of this cost when entering new contractual relationships.

 

3 Ways to Reduce Your Tax Bill

If your tax bill includes amounts due on agent fees paid by your club or other taxable benefits, the total can add up quickly. Here are three strategies to help reduce your tax burden:

 

1. Spread the Payment Over the Year

Instead of paying your entire tax bill in one lump sum, consider arranging to pay it monthly on a pro rata basis. Your accountant can set this up by adjusting your tax code.

For example, a £22,500 tax bill could be broken down into 12 manageable monthly payments of £1,875. While this wouldn’t reduce the total tax owed, it can ease the financial impact, allowing you to maintain your current lifestyle without a large, upfront expense.

Speak to your accountant to explore this option further.

 

2. Opt for Tax-Efficient Investments

If you have stock market investments, consider exploring tax-efficient options to help offset your tax bill.

Keep in mind, however, that these investments often involve higher risks, and you may receive back less than you initially invest.

For those comfortable with the extra risk, options like Venture Capital Trusts (VCTs) and can be effective tool for reducing your tax liability while potentially growing your wealth.

Before exploring VCTs, it’s important to understand the following:

• Eligibility for Tax Relief: To qualify for tax relief, you must hold your investment for at least five years, and the VCT must maintain its qualifying status.
• Limited Investment Windows: VCTs only raise funds periodically, so you’ll need to act quickly when opportunities arise.
• High-Risk Investments: VCTs involve a higher level of risk. Be prepared for the possibility that you may get back less than you initially invest.

 

3. Partner with a Professional

When it comes to managing your tax bill, there’s no better approach than working with an experienced financial planner who understands the unique financial landscape of professional football. That’s where Pro Sport comes in.

Our team can help you identify the most effective strategies to minimise the tax you pay while ensuring compliance with HMRC regulations.

By achieving greater financial certainty, you’ll gain the freedom to make informed decisions about your finances in other areas, allowing you and your family to fully enjoy the rewards of your career.

 

Get in Touch

If you’re looking for expert guidance on managing your tax position, we’re here to help at Pro Sport.

📧 Email: enquiries@prosportwealth.co.uk
📞 Call: 01204 602909

Speak to our team today to see how we can support you.

 

Please note

Don’t invest unless you’re prepared to lose all the money you invest. This is a high‑risk investment, and you are unlikely to be protected if something goes wrong.

The Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs) are typically suitable for UK-resident taxpayers who are able to tolerate increased levels of risk and are looking to invest for five years or more. Historical or current yields should not be considered a reliable indicator of future returns as they cannot be guaranteed.

Share values and income generated by the investments could go down as well as up, and you may get back less than you originally invested. These investments are highly illiquid, which means investors could find it difficult to, or be unable to, realise their shares at a value that’s close to the value of the underlying assets.

Tax levels and reliefs could change and the availability of tax reliefs will depend on individual circumstances.

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.