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This April 2010 sees the introduction by the Government of a new higher rate tax band of 50%, applicable to individuals earning a salary in excess of £150,000 per annum- a figure which is significantly below the average salary level in the Championship, let alone the Premier League.RiskHowever, the tax profession have been careful to warn players of the risks should their advisers assist them with ways to avoid the new 50% tax band. There are several ways in which wealthy individuals have historically mitigated high rates of income tax, such as sheltering pay from income tax through property and other investments, and commonly through investment into film partnerships and other venture capital type investment schemes which allow investors to defer income tax and capital gains tax.In the immediate aftermath of the announcement of the tax hike, another more controversial scheme which was under discussion concerns the potential use by players and clubs of interest-free loans as part payment of wages- The benefit being that such loans are treated as a benefit-in-kind by HMRC and are taxed at 2.5%, thus resulting in a total tax liability of 42.5% as opposed to 50%. This scheme could however dramatically backfire as HMRC could potentially introduce retrospective legislation to block it and recoup the unpaid tax.Minimize the impactAndrew Davis of London-based Accountancy firm Davis Bonler summarises the key strategies available to players:are essentially four different strategies to minimize the impact of the new 50% tax band, as follows:1) accelerating income so that it is received before 06/04/10 - for example any bonuses due could be paid be paid before 06/04/10 and if cash flow is an issue the net bonus could be lent back and 'repaid' in accordance with the clubs 'normal' payment date for bonuses 2) deferring income so that it is received in a later year when tax rates will hopefully be lower - this has particular opportunities for those players who remain non domiciled in the UK and have substantial offshore income or investments could be structured so that tax deferral is possible such as Investment Bonds with drawdown facility.3) reducing taxable income such as salary sacrifice schemes or structuring investments with a capital return such as zero rated preference shares4) paying in such a way that remuneration is subject to lower capital gains tax rates or corporate tax rates such as use of share option schemes such as those involving the use of split interest or freezer shares - This might even encourage a return to the old days of player loyalty.Foreign transfer?Aside waiting and hoping that the Conservative Party will be elected into Government this summer and will return to a higher rate of tax of 40%, one final solution to be considered is a transfer to a foreign club in a jurisdiction with a more favourable tax system. For example, foreign players competing in Spain's top division for up to 6 years are liable for a higher rate income tax of 25 %, whilst in France it is 40%, in Italy 43% and in Germany 45%. Combined with a favourable sterling/Euro exchange rate an exodus to foreign climates may be an increasingly attractive proposition for British players.Editor: There are many ways with careful planning to mitigate the rise in tax rates but of course at all times players and clubs should be aware of HM Revenue & Customs crackdowns on such schemes and future changes that may reduce the effectiveness of such plans.BUSINESS BUSINESS BUSINESS BUSINESS BUSINESS BUSINESS BUSINESS50%tax rate?How players can seek to minimise the impact of the new higher rate tax bracket coming into force in April 2010£££16SPRING 2010

BUSINESS BUSINESS BUSINESS BUSINESS BUSINESS BUSINESS BUSINESSFormer Luton Town goalkeeper Scott Ward explains how he emerged from a football career into the world of tax planning:''I come from a footballing family starting with my Dad who spent time as a youngster with QPR to my elder brother Lee being a trainee with Watford. Brother Darren currently plays for Millwall FC and younger brother Elliott is currently with Coventry City FC.CareerMy Luton Town career was launched by making a perfect debut Vs Brentford FC. After one minute our goalkeeper was sent off and in the process gave away a penalty. I came on and saved the resulting Lloyd Owusu penalty. The game ended 1 - 1. I then spent a total of over eight years with several clubs. After spending pre-season with Coventry City and not receiving the contract I felt was deserved and with my body telling me to call it a day I decided to cut my career short and ventured into the arena that had always interested me: finances and tax.InvestmentsI have always been interested in investments and creating solutions for financial planning and tax solutions. I spent two years in London helping players with their Tax planning during which time I learnt an awful lot and gained some great experience. I then helped my brother Darren start up his financial company called New Incentive. They look after players from the beginning of their career to planning for when they retire.Subsequently, I was approached by Montpelier Tax consultants. They are one of the biggest companies in their field with over 52 offices in over 20 countries. I knew with tax rising to 50% from April 2010 players, football clubs and professionals alike would be in drastic need of some type of planning to help prevent an exodus of players and to prevent clubs from having to find even more capital to keep their current crop of players. Therefore we have created a concept to help individuals and clubs save on the huge outlay they currently face. This is a non aggressive futuristic type of planning that will change the face of football enabling players and football clubs to have a bright future.Planning for the futureWith National Insurance rising alongside the Tax rate it makes perfect sense to lessen the burden faced by everyone on both fields via our unique structure. This enables football clubs to pay less out while enabling the individual whether they are a member of the playing or non playing staff to receive more. It could potentially lessen the football clubs outlay by 30% per annum depending on their structure.It will also enable the individuals to plan for the future via investing with money that would not have usually been accessible. With Montpelier's vast experience and my understanding of football as a whole there is always a solution. This is encapsulated in the Montpelier vision of " think smart-act smart "Scott WardConsultant for Montpelier Tax ConsultantsEmail: sward@montpeliergroup.com Tel: +44 (0)1327 842 780Former Luton Town goalkeeper preaches a different type of savingSPRING 201017This enables football clubs to pay less out while enabling the individual to receive more.Scott Ward