Could HMRC be the single biggest obstacle standing in the way of a healthier Premier League transfer system? That is the question posed by Alistair Culverwell, head of tax dispute resolution at Forvis Mazars.

As another World Cup concluded amid high drama both on and off the pitch, the tournament once again served as a backdrop for high-stakes deal-making, with clubs negotiating through agents to secure the most coveted talent — especially players who had impressed on the global stage.

Yet there is one spectator that pays far closer attention to what transpires off the pitch than on it: HMRC.

HMRC's scrutiny of football is well established in the UK, dating back more than a decade of high-profile disputes over image rights payments and contractual structures. In the year ending March 2024, the tax authority opened investigations into 20 football clubs, 83 football players, and 21 football agents. These groups remain a major area of focus for HMRC — and a persistent headache for clubs, players, and agents alike.

The intensifying tax pressure comes at a time when Premier League finances are already under unprecedented regulatory strain. Several clubs, including Everton and Nottingham Forest, faced points deductions during the 2023–24 season under the Premier League's Profitability and Sustainability Rules (PSR), which cap allowable losses over a rolling three-year period. HMRC's enforcement layer adds yet another dimension of financial risk for clubs already working to stay within spending limits.

For those working in the professional football industry, the situation is unlikely to ease any time soon. The government has launched a consultation on proposals to create a criminal offence for making "reckless untrue statements" in relation to direct taxes. Similar legislation already exists for indirect taxes such as VAT. If enacted, such a law would carry particular risks for football — and especially for players themselves.

HMRC Taking Aim

Under FIFA and FA rules, agents frequently represent both the player and the club during a transfer or contract renegotiation in order to push a deal through. Agents typically divide their fee between services rendered to the club and to the player. Since the club usually pays the fee, the portion attributed to the player is taxed on the player as a benefit in kind.

The sums involved are substantial. Premier League clubs reported spending over £400 million on agent fees in the 2023–24 season alone, according to figures published by the league. With transfer fees and wage bills already stretching club balance sheets, the tax treatment of agent commissions has become an increasingly contested frontier.

HMRC, however, routinely challenges how the total fee is split between club and player services, arguing that a larger share should be taxed on the player. The tax authority also contests what should carry more weight in determining that split — the contractual terms or a substantive analysis of the work the agent actually performed.

The debate centres on whether the division should be based on quantity (time spent working for each party) or quality (which party derived the greater benefit from the agent's services). These are distinctions that can be exceedingly difficult to untangle in the often chaotic, last-minute environment of football transactions.

HMRC's most recent guidance, updated in May 2024, focused primarily on the records that clubs and agents should retain. It did not address the underlying problem — the persistent uncertainty over how the split of an agent's fee between club and player services should actually be determined.

The proposed criminal offence for making "recklessly untrue statements or declarations" only compounds the risk. The definition of "statement" is potentially broad — potentially encompassing oral statements — and recklessness, defined as it is for other criminal offences, is inherently subjective.

Football Finance Under the Spotlight

The risk inherent in football transactions is heightened by the complex web of facts involved. Players under HMRC investigation may not have access to all the facts they are being asked to address — they may not have been present for every stage of negotiations. Even if individuals are never ultimately charged, a criminal investigation can have a profoundly damaging effect on a person's personal and professional life.

Combined with the government's stated determination to crack down on tax evasion and the broader rise in criminal investigations, this could pose a significant challenge for professional footballers. The new powers outlined in the consultation could also bring the UK closer into line with other jurisdictions. Spain is a prominent example of a country that has criminally investigated and prosecuted a number of high-profile individuals, including footballers, with cases involving stars such as Lionel Messi and Cristiano Ronaldo drawing global attention to the intersection of football and tax enforcement.

A simpler and more elegant solution, Culverwell argues, would be early and proactive engagement among HMRC, players, clubs, agents, and their advisers. This approach would eliminate guesswork, allow the parties to present the economics of a deal to HMRC before tax returns are filed, and enable all sides to agree on a logical fee split and have it formally signed off.

Alistair Culverwell is head of tax dispute resolution at Forvis Mazars.