England players face huge tax bills over fees to agents

Some Members of England's Euro 2004 squad face a massive tax bill in a crackdown by the Inland Revenue.

Some Members of England's Euro 2004 squad face a massive tax bill in a crackdown by the Inland Revenue.

Tax officials want to charge players for the fees their agents collect when they move clubs or sign new contracts. At the moment, clubs pick up that cost, often for six-figure sums, and pay the agents their commissions.

But in the Revenue's eyes the agents are being paid for work they do on behalf of the players in the negotiations and officials want that cash to be rated as a "benefit in kind", which would be taxable and come out of the players' pockets.

Several members of the England squad are possible targets. David James, Steven Gerrard, Wayne Rooney, Joe Cole and Wayne Bridge have all either moved or signed contracts in the past two years. Their deals would also have included large payments to their agents, which would have come from the clubs but are now to be judged as "benefits in kind".

Any player involved could have to find huge sums of money - all at 40 per cent tax - with an agreement between the Revenue and Premiership clubs close to being signed.

If, for instance, a player's agent earned £500,000 from his part in a transfer, the player could be hit with a £200,000 tax demand. The agents cannot be touched as their commissions are accounted for.

The Revenue has been in talks with Premiership chairmen about the problem and initially wanted to go back and look for unpaid tax over the last seven years. The compromise is only to include the past two.

This process would mean opening the books to find out what agents fees were paid - and why - and help the Revenue to charge tax bills to players. The Professional Footballers' Association has been alerted to the imminent agreement and is drawing up its response.