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Editorial September 2022 Sports Law & Taxation

It is with much pleasure that we welcome readers to the September 2022 edition (citation: SLT 2022/3) of our ground-breaking journal Sports Law and Taxation (SLT) and online database

Apart from death, tax is one of the other certainties in life and, in view of the fact, that sport, despite the global economic crisis, continues to be big business, worth more than 3% of world trade, we thought that we would devote most of this Editorial to this important subject of tax and sport. In fact, to the need for sportspersons, as high earners, to mitigate its effects, as far as legally possible, through tax planning. So, we invited Kevin Offer, a leading expert and regular contributor to SLT and Partner at Hardwick and Morris, LLP, London, UK, to provide some insights into this complex and fascinating matter. His comments now follow.

The importance of tax planning for sportspersons

Sportspersons in recent years have come under increasing scrutiny from tax authorities. For example, Sky News reported in 2020 that the UK tax authorities (HMRC) were specifically focusing investigations on young professional footballers, who may not be receiving clear tax advice, but have created structures involving their image rights or sponsorship income that, in the view of the tax authorities, amount to tax evasion, which is a criminal offence. On the other hand, tax avoidance, that is arranging one’s personal and business affairs in such a way as to mitigate the tax effects, is quite legitimate. A number of cases have also been brought by the Spanish tax authorities against footballers and entertainers in recent years plus other cases around the world. These cases invite the question as to whether the individuals received proper tax planning advice on their personal and business affairs.

Tax authority information

As the world has become more automated, so has the way tax authorities operate. For example, the UK tax authorities use a computer algorithm known as “Connect” to identify areas, such as sport, and individuals whom they consider are at high risk of under declaring income. The main areas of interest include individuals with multiple properties, overseas assets and complex planning in place. This is likely to apply to many successful sportspeople. The algorithm will look at information available to HMRC and compare it to identify potential errors or omissions on and from tax returns. A typical flag may arise where there is a significant difference between amounts declared in consecutive tax years. This may be due to increased/decreased earnings that can arise during a sportsperson’s career but, without any obvious reason, any discrepancies may indicate potential use of tax avoidance schemes, complex planning or errors on the tax returns.

Other areas that the algorithm takes into account include purchases of high value assets, such as real estate or cars, large amounts of money being transferred into and out of UK bank accounts, use of credit cards in the UK and border agency data. Media exposure will also be taken into account so posts on social media should be carefully considered. A report of a football transfer or new contract is likely to engender an expectation of a signing fee or increased earnings creating an expectation of an entry on a tax return.

As indicated above, tax authorities will also have access to data collected at borders. Information is also received from other countries under automatic information exchange agreements. Again, if the information does not appear on a tax return, algorithms are likely to mark the return for checking.

With all this information available to tax authorities, it is important that sportspersons ensure that their affairs are in order and will stand up to scrutiny. Part of this process will be taking expert tax advice to ensure that they do not suffer any unexpected tax charges. However, any tax planning that is overly aggressive or is not in the spirit of tax legislation should be avoided. Even if such planning is legal, it is likely that the effect on personal reputation will be negative, due to press articles and public opinion that highlights “moral” obligations to pay a “fair share” of tax.

Dealing with tax authorities

Successful sportspersons are likely to be classified as “High Net Worth Individuals” (HNWIs). This being due to the levels of income that they can command, the value of the assets they can amass and the complexity of their affairs. As a result, tax authorities regard sportspersons as having a high risk that there is something incorrect (however minor) with their tax affairs and are more likely to be the subject of a tax enquiry.

When an enquiry is opened, it is essential that a sportsperson is properly represented. An expert adviser will ensure that matters are dealt with promptly and that all relevant information is provided. In addition, however, the adviser will ensure that the tax authority is not provided with information that may be irrelevant to the enquiry.

The adviser dealing with an enquiry is likely to be the person completing the local tax returns. However, for international sportspersons, it will be necessary to have a number of other advisers in other jurisdictions. It is, therefore, important that a sportsperson engages with an adviser that can either source advice in other countries or will be able to work with other advisers to ensure that the advice given is tax efficient across all jurisdictions.

There have been cases where overseas jurisdictions request information from an individual, who is tax resident in another country, using agreements for mutual assistance. The key point, however, is that the information requested must relate to a specific individual’s tax liability. It is, therefore, important that advice is taken as to the relevance and legality of the request, as well as the best way to respond to any request.

Information requests

As mentioned above, a tax authority may request information from persons outside the country. This raises the question of whether the tax authority has the power to request such information. This point was considered by the courts in the UK. See Tony Michael Jimenez v. FTT [2019] EWCA Civ 51.

Jimenez had been resident in the UK for a number of years before moving to Cyprus and then to Dubai. The UK tax authorities issued an information request notice (Schedule 36, Finance Act 2008) to Jimenez in Dubai requesting information for the ten-year period from 2004 to 2014. Jimenez appealed against the notice, as he was not resident in the UK and on the basis that HMRC were limited to issuing information notices to UK taxpayers resident in the UK. The Court confirmed that the notice related to UK resident individuals and that, if HMRC required information relating to individuals who were overseas, then they should use their existing tax cooperation agreements with other countries. HMRC appealed this decision in the Court of Appeal.

In the Court of Appeal, LJ Patten said that, in his view, it would make sense to align HMRC powers with the scope of the relevant taxes. For example, non-UK resident individuals can still be subject to UK income tax and capital gains tax. Restricting HMRC’s ability to request information from non-resident individuals in relation to their UK tax position would undermine HMRC’s authority for checking a taxpayer’s tax position. The notice may be issued to a “UK taxpayer” and there is no legislative reference to their residence status.

This case demonstrates that, if a sportsperson or one of their supporting team, are served with a notice from a tax authority in another country it should not be ignored. The request should be reviewed carefully by a tax adviser, who will check the notice was correctly served and that the information is reasonably required, relevant to the person’s tax position and in their power or possession to obtain. The person receiving the notice should not respond without taking advice as, once a document has been seen by a tax authority, it cannot be unseen.

With the implementation of the Common Reporting Standard, it is more likely that individuals, who were previously resident in one country, may be issued with information notices to check their residence position and tax calculations in relation to their overseas assets. It is, therefore, important that any move of residence is carefully planned and there should be no assumption that matters will be closed if a sportspersons is no longer resident in a country or was only resident in that country for a short period of time.

For example, suppose an international footballer became UK tax resident in 2020 due to a one season loan period at an English Premier League club. After taking advice, the player set up an image rights structure overseas but, due to inaccurate advice, his UK address was provided as the location of the management of the company. In 2021, the player returned to his home club in Spain and ceased to be UK tax resident. That player and/or his advisers may now receive enquiries about his structure from the UK tax authorities in relation to the period of residence. With proper tax planning this enquiry would have been avoided.

Tax avoidance schemes

There have been a number of high-profile athletes who have been reported in newspapers around the world for not paying their “fair share” of tax. Most of these reports arise from their tax planning being regarded as participation in tax avoidance schemes. Tax authorities regard such arrangements as “aggressive avoidance” on the basis that they are designed to “artificially” reduce a person’s tax liability. Examples of tax avoidance schemes include investments in films that create a high level of deductions and the use of loans from trusts.

Most of these arrangements are perfectly legal and the main risk of investing in such schemes is the potential damage to reputation as a result of adverse press reports. When taking advice it is, therefore, important that the tax advice includes an explanation of the risk to reputation as well as the technical aspects.

Where a sportsperson has entered into a tax avoidance scheme, it is worth reviewing the arrangements to ensure that the tax planning is still effective. As personal circumstances, tax law and public attitude to tax arrangements of HNWI’s change, it is important that tax planning is not a one-off event but is an ongoing exercise.

DAC6 - Directive on Administrative Cooperation

The impact of the host of EU tax disclosure rules in recent years should not be ignored. It is important that tax planning considers these directives as they are far reaching and can apply to sportspersons.

DAC6 broadly requires the disclosure of any cross-border arrangements, including those that have a “potential tax effect”, even if the arrangements were not planned with tax avoidance in mind or where one of the benefits of the arrangement is a tax advantage, again even if this was not the aim or one of the aims of the arrangement.

When specific hallmarks are identified, any tax planning will need to be reported to the relevant tax authority by the intermediary or tax adviser. This puts significant pressure on intermediaries to determine whether the transaction falls within the rules and ensuring the correct information is disclosed within the relevant time limits. The benefit of clear advice cannot be underestimated.

For sportspersons, DAC6 will need to be considered when tax planning involves overseas trusts or companies to protect assets in countries other than the one in which the sportsperson is resident. Any intermediary who “designs, markets, organises or makes available for implementation or manages the implementation” of the “cross-border arrangement” is required to make the disclosure. This can mean that a number of advisers may have an obligation to make a disclosure. It would, therefore, be important for advisers to communicate and agree the disclosure to be made to meet these obligations and minimise future queries on the transaction.

Reputational risks

I have already mentioned the importance of tax planning giving consideration to non-tax issues such as reputational risks. Many tax authorities have the power to publish details of whom they consider to be deliberate defaulters, but the media are happy to publish large reports about tax planning arrangements whether they are legal or not. It is, therefore, important that advice is undertaken both for the risk of a challenge to the tax position of the proposed transactions and to reputation from a successful challenge or press speculation.

Reputational damage can have a huge impact on a sportsperson’s income. When the “Paradise Papers” came to light a few years ago, a number of high-profile celebrities and footballers were named as holding overseas assets in tax havens to avoid paying a “fair” amount of tax. Walkers Crisps, for whom Gary Lineker is an ambassador, became aware of the situation almost immediately. The company stood by Gary Lineker, but not every footballer will be so lucky. Advisers, therefore, need to ensure that tax enquiries and investigations are dealt with promptly and in full to ensure that the full mitigation of penalties is given and that sportspersons are not publicly named.

Plan in advance

I have so far highlighted what can go wrong and why it is, therefore, important to obtain full tax advice. The conclusion must be that careful planning in advance is advisable to reduce the risk of challenges. And avoid adverse publicity.

Any advance planning should consider the full facts and circumstances of the individual sportsperson. This should include:

–   reviewing the rules for determining tax residence in any jurisdiction in which the sportsperson spends significant time. This may be time spent training, performing and personal time. The rules can be complicated, and it is important to plan carefully to avoid becoming resident and incurring unexpected tax charges that may be avoided.

–   reviewing tax legislation for countries in which a sportsperson will “work”. This can include time spent training and appearances as well as actual performance.

–   reviewing the application of double tax treaties between countries where a sportsperson “works” and their country of residence. The impact of art. 17 of the OECD Model Treaty can mean tax charges may arise on payments that arise in another country if they can be linked to a performance in the UK. The application of art. 17 can be complicated, and it is, therefore, important that careful planning takes place.

–   In light of the above, it is important that a sportsperson is well advised by someone with the right knowledge and experience. There is often a temptation to take advice from friends and family due to trust issues but developing a close relationship with trusted, professional advisers will ensure planning covers all necessary areas.

–   lastly, it is important for the sportsperson to take responsibility for his/her affairs. The obligation to comply with tax and other legislation lies with the sportsperson. That does not mean that the sportsperson must become an expert, but an awareness of the need for careful planning and appointment of professional advisers will help prevent any unexpected events.


£ 1.9 billion The Deloitte Sports Business Group reports in its Press Release of 2 September 2022:

–   Premier League clubs’ gross spend of £ 1.9 billion is 67% higher than the previous summer transfer window (£ 1.1 billion), and 34% higher than the previous record (summer 2017: £ 1.4 billion);

–   gross spend was so high among Premier League clubs this summer (£ 1.92 billion) that, before this season’s January transfer window has taken place, the 2022-2023 season already has the highest transfer spend since the two-window season began, exceeding the previous record by 3% (2017-18: £ 1.86 billion);

–   Premier League clubs’ net transfer spend surpassed £ 1 billion for the first time ever;

–   net spend among Premier League clubs constituted 18% of their estimated revenue for the 2022-2023 season, an increase on the previous summer (10%) and the pre-pandemic average (2017-2019 three-year average: 14%);

–   gross spend increased on the previous summer in all of Europe’s “big five” leagues individually, with their overall gross spend increasing by 52% (2022: € 4.5 billion; 2021: € 3.0 billion);

–   Premier League clubs were responsible for 49% of collective gross spend across the “big five” (Premier League: € 2.2 billion; Serie A: € 749.2 million; Ligue 1: € 558.0 millon; La Liga: € 505.7 million; Bundesliga: € 484.1 million);

–   championship clubs’ gross spend more than doubled on the previous summer but was still some way off pre-COVID levels (2022: £ 86.0 million; 2021: £ 35.1 million; 2017-2019 three-year average: £ 169.4 million);

–   Premier League clubs purchased a total of 19 players from Football League clubs compared to just 6 in summer 2021. 

Premier League clubs’ gross transfer spend totalled £1.9bn in the summer 2022 window, the highest spend ever recorded in a single transfer window by a margin of £ 487.8 million, according to Deloitte’s Sports Business Group. The previous record was set in the 2017 summer transfer window, when clubs spent £ 1.4 billion. In 2021, Premier League clubs spent £ 1.1 billion during the summer window. 

With the January transfer window still to come, the 2022-2023 season already has the highest transfer spend since the two-window season began (£ 1.92 billion), narrowly ahead of 2017-2018 (£ 1.86 billion). For more information, log onto

Articles in this issue


We now turn our attention to a couple of the interesting articles that you will find in this issue.

We highlight one on on-line gaming and gambling in Gibraltar, a British Overseas Territory on the tip of Europe, which, despite its size - a population of some 32,000 and an area of 6.8 km2 – seems to be punching against its weight, so to speak, when it comes to the regulation of gaming and gambling in sport. As the authors, Ian Felice and James Noguera of the leading Gibraltar law firm, Hassans, point out in their introduction:

Gibraltar continues to flourish as a contemporary common law jurisdiction, boasting a progressive offering for many sectors and industries, and which, together with its consistently modern governing environment, have allowed it to assemble the foundations of a stable economy built on, inter alia, financial services, including gaming and fintech.

The development of online gaming and gambling in Gibraltar can arguably be seen as one of the most impressive jurisdictional success stories in recent memory. Despite its size and more limited allocation and availability of resources, Gibraltar has been at the forefront of the development of the gaming industry from its inception in the early 1990s. A globally recognised innovator in this space, Gibraltar has been nothing short of a hub for many recognised industry players, ranging from established large gaming “B2B” and “B2C” operators to lucratively funded and well established start-ups, including, but not limited to, Entain, 888casino, BetVictor, Betfred, William Hill, Mansion, Pragmatic Play, and, most recently, DAZN Bet. Arguably, the secret in attracting such high calibre “blue-chip” players in the gaming and gambling market has been Gibraltar’s ability to create a robust legislative framework, which has been capable of providing a balance between the commercial realities of the sector, an effective streamlined licensing regime, and simultaneously also ensuring high standards of transparency, oversight and the adoption of best market practices in line with international standards.

Summarily, and pursuant to the Gambling Act 2005 (“the Act”), the regulation of all licensed gambling activity falls within the remit of the Gambling Commissioner, who is appointed by the Minister responsible for gaming, and whose office extends to the role of the Licensing Authority (as defined in the Act) and is required to ensure that licensees conduct themselves in conformity with the terms of their licences and the Act. Although, strictly speaking, both the Minister responsible for gaming and the Gambling Commissioner are distinct in law, both offices work closely together, leveraging synergies for the better of all licensees, stakeholders and the jurisdiction’s international standing as a whole. Historically, the Gambling Commissioner, together with HM Government of Gibraltar, have adopted a very open and transparent approach, engaging in clear and direct communication with all licensees in monitoring their activity and always ensuring full compliance.

The Act, further reinforced by strict anti-money laundering legislation and codes of practice, the latter of which are issued from time to time, regulates an extensive cohort of remote and non-remote gaming activities, and is underpinned by a comprehensive criteria and application process for the provision of licences. Summarily, the application process requires licensees to demonstrate, inter alia, sound business planning, adequate working financial resources, a demonstrable track record of integrity and compliance, and proportionate substance in making an economical contribution to Gibraltar. Subject to the quality of prospective licensees’ applications, licences are generally granted within a two-to-six-month timeframe. In truth, the regulatory framework in Gibraltar is one which can be considered business friendly, striking a fundamental sense of equilibrium between competing interests, such as applicants’ desires to secure swift access to the marketplace, but simultaneously ensuring effective scrutiny and protection of the integrity of that same market. The result is simply a framework in a jurisdiction which provides political stability, and a strong commitment to transparency and the rule of law.

As you will read in the course of their article, the authors chart the growth and regulation of the sports gaming and gambling industry in Gibraltar and its future development and point out that:


“As innovation in the gaming space continues to be forthcoming, Gibraltar remains confident of its regulatory capabilities, including the commencement of the recent consultation process in the gaming sector, which will further modernise its offering in this space and maintain its position as a market leader. Undoubtedly, Gibraltar’s track record suggests that it is not a jurisdiction that is likely to rest on its laurels, particularly in the aftermath of brexit; Gibraltar remains hungry and ambitious to identify new opportunities and enter emerging markets, as most recently witnessed in the fintech and digital asset industry, the adoption and growth of which can be considered to have exhibited many of the themes and patterns seen in the development of gaming, including, most recently, in the world of sport.

And conclude as follows:

Ultimately, irrespective of their ambitions for further integration into the sports world, provided all fintech firms operate within the safe harbours of a robust and commerce friendly regulatory framework, such as Gibraltar’s, the industry has the ability to leverage blockchain technology to drive business growth in sport, and many other areas.

On the sports tax side, we would mention, in particular, a very interesting article on the taxation of NFTs (non-fungible tokens) in the UK by Kevin Offer, who has also contributed on tax planning to this Editorial. As he notes from the outset of his analysis of the UK tax situation:

The popularity of cryptocurrencies and NFTs has increased in recent years with some NFT sales commanding significant amounts. These have tended to be more in the areas of art and entertainment, although the large amounts that can be raised by issuing NFTs has attracted interest from sport.

Ownership of an NFT is usually assumed to mean that the owner holds an underlying asset, similar to a digital certificate of title or stamp of authenticity. A record of ownership can be found on the blockchain with the digital asset stored on a server owned by a host platform. Effectively, the NFT consists of a signpost pointing to the digital asset. The exact nature and value of an NFT is, therefore, unclear. This leads to the legal status in the UK also being uncertain.

In addition, it is often unclear as to what rights are granted by an NFT. Would, for example, the NFT include any copyright ownership? Some NFTs will include a right to a royalty to the original seller every time there is an onward sale, so perhaps copyright is retained by the sportsperson?

NFTs allow for owners to hold a fraction of the overall asset allowing for these fractions to be traded. Where this is permitted then, from a UK perspective, the NFT may constitute a security leading to a need to be regulated under the UK Financial Conduct Authority.

The tax treatment of NFTs in the UK is equally uncertain. To date, there has been no HMRC guidance on the UK tax treatment of NFTs. It is generally assumed that, in a similar way to cryptocurrencies. they would be treated as a taxable asset for capital gains tax and inheritance tax purposes. However, in some circumstances, the sale of the NFT may give rise to an income tax charge.

He concludes as follows:

The growth of NFTs and the large amounts that can be generated by them has led to a need for clear guidance on how these assets will be treated for tax purposes.


Whilst the general view in the UK is that they are assets on which capital gains tax will be due on a profit on disposal (unless the seller is undertaking a trading activity) there remain large areas of uncertainty.


The global nature of the NFT market also demands an international approach to taxation. The sums generated from issuing NFTs can be very large and the uncertainty, both in the UK and in other jurisdictions, is likely to lead to differing tax treatments and potential double taxation.


It is, therefore, hoped that the UK tax authorities and the Government will consider not just the position in the UK but the effects of taxation in other countries. What is certain is that the sums that can be generated and the demand from fans will mean NFTs are here to stay for a while.”

As you will see from the Table of Contents of this issue, we include a wide range of other sports law and sports tax articles, which will also engage and inform our readers’ attention and also provide them with many things to consider and ponder.

As always, we would welcome and value your contributions in the form of articles and topical case notes and commentaries for our journal and also for posting on the SLT dedicated website which has an increasing-wide footprint!.

So, now read on and enjoy the September 2022 edition of SLT.

Dr. Rijkele Betten (Managing Editor)

Prof. Dr. Ian S. Blackshaw (Consulting Editor)

September 2022

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The Journal

Sports Law & Taxation features: articles; comparative surveys; commentaries on topical sports legal and tax issues and documentation.

The unique feature of Sports Law & Taxation is that this Journal combines  up-to-date valuable and must-have information on the legal and tax aspects of sport and their interrelationships.

Global Sports Law and Taxation Reports feature: articles; comparative surveys; commentaries on topical sports legal and tax issues and documentation.

The unique feature of Global Sports Law and Taxation Reports is that this Journal combines for the first time up to-date valuable and must-have information on the legal and tax aspects of sport and their interrelationships.

The Editors

The editors of  the Journal Sports Law & Taxation are Professor Ian Blackshaw and Dr Rijkele Betten, with specialist contributions from the world's leading practitioners and academics in the sports law and taxation fields.

The Editors

Managing editor
Dr. Rijkele Betten

Consulting editor
Prof. Dr. Ian S. Blackshaw

Editorial board

Prof. Guglielmo Maisto
Maisto e Associati, Milano

Mr. Kevin Offer
Hardwick & Morris LLP, London


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