goal-300x180As readers may have noticed, the Euro football championships are on at the moment so I thought it might be interesting to look at a couple of instances where the worlds of football and tax have crossed paths.

Remember Peter Shilton?  Once an England goalkeeper, he holds the record for England caps, with 125 games for his country. In 1982, he left Nottingham Forest and was transferred to Southampton.  He was paid a joining fee by Southampton but he was also paid a leaving fee by Nottingham Forest, of £75,000.  It was clear that the joining fee was taxable as part of his employment income, but what of the leaving fee?
The High Court decided that it was ‘for’ his employment but not ‘from’ his employment and so was not taxable (no, I don’t understand either).  But the taxman insisted on a replay in the Court of Appeal and lost again. So the taxman insisted on another replay, this time at the equivalent of Wembley, the House of Lords.

In the House of Lords, Shilton’s game went to pieces.  There were five judges and Shilton lost 0-5.  The Lords deciding that the payment of £75,000 was clearly made to induce Shilton to become an employee of Southampton and for no other reason.  The fact that it was paid by Nottingham Forest didn’t matter.

So, with the taxman one-up in the series, let us go back to 1966, when England actually managed to win something (there’s…some people running on the pitch…they think it’s all over….it is now, it’s 4!).  After England’s victory the English F.A. paid each member of the squad a £1,000 winning bonus.  On top of that Radox Bath Salts gave prizes of £1,000 and £250 to the players they judged to be the best in the whole tournament (they happened to be Booby Moore and Geoff Hurst).

In a move which would be seen today as a PR disaster, the Inland Revenue decided they wanted to tax all these sums. Now, I’m not suggesting the referee (the Judge, Mr Justice Brightman) was biased but I can’t help thinking he decided the verdict and then worked backwards to get the argument.  He decided that none of the sums were taxable as they had the “quality of a testimonial or accolade” rather then employment income.  If the Inland Revenue was upset, the Inland Revenue’s barrister was not.  In court, he actually congratulated Bobby Moore on the verdict, “which [he said] I am sure will really not cause any serious heartburn anywhere”.  (Incidentally, given today’s sky-high football salaries, you might be interested to know that Bobby Moore’s employment income for 1966/7 was £11,491.)

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