fb

The Premier League and the UK income tax rate…

The Premier League and the UK income tax rate…

Cristiano Ronaldo’s well publicized move from Manchester United to Real Madrid in the summer understandably received a lot of publicity. A world record football transfer fee of £80m is bound to catch the attention.

Ronaldo’s first year remuneration from Real Madrid is reported to be in the region of £11m. Students sitting the 2009 exams should be well aware that the 40% tax rate for the 2008/09 tax years applies to taxable income above £34,800. An individual in the UK with annual earnings of £11m would exceed the 40% threshold in just 2 days!

There were no doubt many factors that persuaded Ronaldo to move to Spain to play for Real Madrid. From a tax point of view though, Spain has favorable tax legislation that enables foreign players to pay tax in the region of 23%. When you compare this figure with the 40% top rate in the UK (and the upcoming 50% tax rate which is not examinable in the December exams) and apply the difference to the amounts of remuneration that Ronaldo is earning then the tax bill  would be significantly lower in Spain than in the UK. Approximate figures show a difference in tax next year when the 50% rate is in place of nearly £3m per year. This adds up to a significant amount when looked at over his contract period of 6 years.

Of course the football purists amongst us would argue that it’s the football team and supporters that are important rather than the tax bill but then again I can’t be sure about this until somebody offers me £11m a year to live in the sun in Spain!

Share this entry

Recent articles

View All Articles
10 reasons CFOs are saying goodbye to their roles
Apr 02, 2025
Title
10 reasons CFOs are saying goodbye to their roles
Excerpt

Last year, chief financial officers (CFOs) left their roles at the fastest rate in six years, according to […]

Women at the top: EY becomes first Big 4 firm with dual female leaders
Apr 01, 2025
Title
Women at the top: EY becomes first Big 4 firm with dual female leaders
Excerpt

EY has just made history – Alison Duncan will take over as UK Chair of EY, joining forces […]

When Audits Fail: PwC, Wyelands Bank, and the £2.9M Mistake
Mar 26, 2025
Title
When Audits Fail: PwC, Wyelands Bank, and the £2.9M Mistake
Excerpt

What happens when auditors fail to properly understand the business they’re auditing? That’s the question at the heart […]

Volkswagen sells more sausages than cars
Mar 18, 2025
Title
Volkswagen sells more sausages than cars
Excerpt

No, we’ve not made an early April Fools Joke. It’s true. Volkswagen do sell more sausages than cars. […]

EY UK restructures leadership: 30 partners to exit
Mar 16, 2025
Title
EY UK restructures leadership: 30 partners to exit
Excerpt

The professional services industry is experiencing a shift, with EY announcing one of its most significant partner redundancy […]

Worth its weight in gold?
Mar 14, 2025
Title
Worth its weight in gold?
Excerpt

When most people think of gold, they picture sparkling jewellery, luxury accessories, or even Olympic medals. But gold […]

Over paid, under performing… the players or the shares?
Mar 11, 2025
Title
Over paid, under performing… the players or the shares?
Excerpt

Manchester United recently announced plans for a new 100,000-capacity stadium, with an estimated cost exceeding £2 billion. While […]

Top 10 unusual KPIs: strange ways businesses measure success
Mar 04, 2025
Title
Top 10 unusual KPIs: strange ways businesses measure success
Excerpt

Key Performance Indicators (KPIs) are essential for businesses to measure performance and track progress. While traditional KPIs focus […]