Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Employment Income Manual

From
HM Revenue & Customs
Updated
, see all updates

Tax treatment of Association footballers: signing-on fees

Signing-on fees are sometimes paid:

  • when a player first becomes a contract player, or
  • when a player is transferred from one club to another.

These payments are usually chargeable to tax as employment income (see generally EIM00510 onwards). Often the payment will be included in the player’s contract and will be payable by instalments over the term of the contract.

If a signing-on fee is paid “for loss of amateur status” when a player first becomes a contract player it might be argued that it is not taxable (following Jarrold v Boustead (41TC701), see EIM00710). (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Where a player is transferred from one club to another, he may in certain circumstances receive signing on fees from both clubs. It should be noted (following Shilton v Wilmshurst, (64TC78)) that both payments will represent earnings from his employment with the new club even though the old club will no longer have an interest in his performance (see EIM00700).

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)