HMRC warning to football clubs over bumper 2023 transfer window

Published on August 3, 2023
HMRC warning to football clubs

HMRC have written a warning letter to Football Clubs advising them that they understand this will be a busier than usual transfer season and telling clubs to ensure they have appropriate evidence to ‘show the commercial basis’ for any split in dual agents fees.  Dual agent representation is the most common type of representation in the Premier League – last season 494 out of 769 contracts were dual rep.  

Dual agent fees have been in the press for many years and HMRC’s interest in these payments has steadily increased with record number of enquiries into premier league players in recent years.  

Why have HMRC sent this letter to my club?

With the pending FIFA agent changes due to come into force on 1 October 2023, HMRC are effectively sending a warning shot to Clubs over dual agent fees.  Where there is a dual agent contract HMRC believe there is a significant risk of tax being underpaid.   

If a club splits an agent fee say 50/50 for services to the club and services to the player, the Club will report this 50% player fee as a benefit on the players P11d. If this is the ‘wrong’ split HMRC can open up enquiries into the Club and the Player.  The Club is responsible for ensuring that they accurately record taxable benefits via the P11D.  This letter to Clubs has been sent at the same time as HMRC launch a P11D review into Wealthy Individuals.  All things are pointing to more enquiries into Players and Clubs where Dual Rep agreements are used.

What should clubs be doing?

The most important thing to do is gather evidence.  The two page letter from HMRC uses the word evidence 8 times.  Clubs must show that they have kept accurate & timely records.  Have a robust, clear and evidence backed narrative for any split of agents fees.  The most important thing to note is that Clubs cannot rely on the contract alone.  HMRC have won many enquiries securing additional tax payments on agents fees even when the contract supports the 50/50 split. If you need support with what kind of evidence you should retain on file, contact us at

The letter contains 7 key evidence areas that HMRC will be expecting to see from Clubs in case of an enquiry. What do HMRC expect us to evidence?

Football clubs need to have a plan. What’s the plan when HMRC write to request information? How much information should be given? Our firm has seen Clubs on numerous occasions providing excess information resulting in further enquiries into both other areas for the Club and into their star players. 

Consider getting an outside expert opinion on how the fee should be split for any high risk transactions. 

HMRC define high risk transactions in this area as:

  • Payments treated as a benefit to the player that are lower than the amounts those players are due to make to agents under existing player/agent agreement
  • Agents acting for both selling and buying club in the same transaction
  • Payments to individuals who are connected with (or family members of) the players.
  • Payments to corporate (or other) entities that are controlled by individuals who are connected with family members of players.
  • Payments to those acting as sub-agents.
  • Payments that are said to be 100% for club services where it is not clear that another party is acting for the player.
  • Payments to agents where they are said to act for corporate entities (typically based in tax havens) that appear to have little or no substance.

If you have not received the letter from HMRC yet and would like to speak to us about the contents of the letter or if you’d like to talk through best practice for gathering evidence you can arrange a private call with Sofia by emailing  

How does this impact Agents? 

We understand that agents are getting significant push back from Clubs even in cases where a dual agent 50/50 would be appropriate.  Agents should also keep records and evidence of the work they have completed for both the Club and the Player. This can include time sheets, notes of calls, meetings etc. Your records should be able to clearly demonstrate the value provided to the Club for the services. If you are an agent interested in learning more about how HMRC investigations can impact you, please email us at

How does this impact Sports Lawyers?

Contract negotiations are never straightforward, this will likely add another layer of complexity.  If you are representing the Player it will be crucial to understand if the agent fee has been split in a defensible way and if there is evidence to back it up. If not, HMRC can seek to recover the additional taxes due directly from the player (this would be a tax of 45% of the agent fee – a significant sum of money). Getting an expert opinion on the agent fee split is essential for any dual representation contracts. 

If a loyalty bonus is being considered to cover the potential tax on the agent fee this almost always done on the 50/50 split. That may not be the right split. Therefore, before accepting that split consider if alternative wording could be inserted to cover any tax due on the agent fee. This raises other issues such as payment dates etc if there is no definable figure.  Or consider if the 50/50 split is the right one to be using. 

If you’d like to discuss the contents of this letter and how it impacts you can arrange a call with Sofia by emailing  

Juno Sports Tax is the UK’s first Chartered Tax firm dedicated solely to the sports industry. We support clubs, agents and professional sportspeople with expert tax advice and a deep knowledge of the sports industry.

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