So football clubs have been caught by HMRC on the reclaiming of VAT on agents fees.
FOOTBALL clubs face a multi-million-pound bill from the taxman after a landmark ruling yesterday over payments to agents.
A VAT appeals tribunal ruled that Newcastle United was not allowed
to claim back the tax on fees paid to agents involved in transfers
between clubs and contract negotiations with players.
Why is this? What is the point at issue?
Football clubs are entitled to recover the VAT paid on any goods or
services purchased in connection with their business. However, the
Revenue argued that when fees are paid to agents, the agents are acting
for the player and not the club. Since the player employs the agent,
the Revenue argued that the club has no right to deduct any VAT that it
incurs when making a payment to the agent.
OK, so the agent works for the player. But didn’t we just have this argument with literary agents? There the argument by that same HMRC was that agents are not in fact employed by writers in the course of business. That interpretation would seem to argue that VAT should not be charged at all, yes?
Is this simply the Revenue wanting to have its cake and eat it too?
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