🔗 Share this article Increased Tax Bills for Players May Lead to Demands for Higher Wages from Clubs English top-flight teams are facing the prospect of increased salary costs following the government’s announcement in the budget that image rights payments will be treated as earnings from April 2027. This adjustment will result in many top-flight players with significantly larger taxation expenses, and several agents have indicated that these costs are expected to be transferred to teams, particularly for players who sign new contracts before the policy is implemented. Understanding the Consequences of Image Rights Taxation Numerous footballers receive branding income directed to limited companies for commercial earnings, such as endorsement agreements and advertising income. Starting in 2027, these will be subject to the 45% top rate of income tax, instead of the corporate tax rate of 25 percent. Some Premier League players signed from overseas are understood to have clauses in their contracts that hold their teams responsible for any significant changes to the UK’s tax regime, but players without such terms are expected to request higher wages. Contract Negotiations and Monetary Consequences Many players negotiate contracts based on net pay, with teams managing their tax affairs, a practice expected to persist. Branding income often constitute a substantial part of footballers' earnings, which is permitted by the tax authority if the sum is considered commercially realistic and remains below 20 percent of total earnings, so the increased tax liability for clubs may be considerable. “With these changes, the government is ensuring compensation aligns with fair taxation, and giving a clearer picture of the salary expenditures driving economic viability discussions in English football. There will be some immediate challenges as clubs adjust, but in the long run this promotes greater honesty, accountability and trust in the economics of the game.” Government’s Move and Historical Context This official step comes after a extended crackdown by HMRC on players' income, which has recouped vast sums of money in unpaid tax. Personal branding income will be treated as personal earnings from April 2027. Athletes could demand higher wages to offset rising tax bills. Clubs confront potential rises in wage expenditures as a result. The adjustment aims to ensure fairer taxation for high-earning players.