Clubs will have to pay £1.5 million to HMRC in tax avoidance. At least one player was paid 50% of his salary as image rights.

No clubs named!!! isn't it against the "spirit of the cap"?

Some clubs also to be investigated for EBTs for which discretionary payments have been made into offshore accounts. Hull are the only named club but it does say "some clubs"

I have been saying this for a while in relation to "spirit of the cap". It will be interesting to see what clubs are involved and if their fans were as scathing on us for deferring payments on contracts.

Dont be silly, nobody will get the same abuse/anger/hatred that we got. Everybody hates us with a passion no matter what, im more convinced now than ever after the events ive witnessed the last few days

It's a pity the HRMC can't do a real undercover sting operation on wads of money passed to certain players in plain envelopes under the table.

This must be the most known but never talked about thing in RL.

"50% of salary for image rights" Are you sure its not an ugly tax on Ben Westwood, if it is then the figure should be 100%

Before the comebacks regarding G Hock and his rugged features; he would have been serving his ban so the ugly tax could not be enforced

The irony will be that while deferring wages is not against the law of the land whereas tax avoidance is, you can bet your bottom dollar the argument will be image rights payments were not against RFL rules.

Issues like this are specifically addressed within the Salary Cap rules and are neither against the Salary Cap nor its spirit, there is allowance for things like this to happen.

The Communist cap is a joke and I know my good friends from Wigan have been opposed to it for years.

I reckon we should get together and campaign to get it abolished. Why should the top clubs be punished for bringing money into the game? If Wigan want to bring top players like George Carmont over to Super League then they should be encouraged as they bring new fans into the game and I know you wouldn't begrudge us signing players like Monaghan and King.

Sorry Sally there is a distinct lack of bitterness and jealousy in your post. Please edit and resubmit.

it would be a shame if certain clubs where found guilty and stripped of their 3 recent glories and made to get rid of 4 or 5

Tax avoidance isn't illegal, tax evasion is.

I imagine you avoid tax yourself, if you have a pension.

Anyone remember the comments from Maurice Bamford, that salary cap breaches are far worse than going into liquidation and the points deduction should reflect this.

Hilarious!

Yet again the hypocrisy of the Wigan hating pro-CC mob is laid bare for all to see.

You would have thought that the breach of the "spirit of the cap" that this clearly represents would have all cap supporters up in arms, that they would already be demonstrating outside RL HQ about this "cheating".

But of course they won't, because they are worried that their clubs will be among those found guilty. And it's always been my club first with these muppets. Do they care about the game as a whole? Of course not, yet they are the first to throw that accusation at us. (Even though everyone knows IL would be the last chairman to go on a spending spree!).

This has cheered me up immensely after the weekend.

The Cup has come home and now the appalling, sickening hypocrisy of the pro-CC people has been exposed.

It's disappointing we couldn't do the double, but all in all 2011 hasn't been a bad season.

It must be counted on the cap though. You can't pay a player £25k a year on the cap and then pay £25k image rights off the cap. His 'Salary cap value' as the rules call it would be £50k.

If that is what is meant by it then some clubs will be in Melbourne style trouble.


edit - Deano, you need to stop calling both the Challenge Cup and the Communist Cap CC as it's confusing as hell

What did I just say! It may be illegal by the law of the land but if its not against the RFL rules then that doesn't matter.



You do understand the clubs are breaking the law hence why they will have to pay the back taxes?

A bad choice of word on my part. The clubs have clearly evaded tax hence the requirement to pay it back.

My point still stands.

Look if Wigan are found to be over the cap my view is big deal. It's not the players fault or coaches fault, Maguire put together a team which played entertaining rugby and entertained the Wigan fans and so I will always respect Wigan's league title and Grand Final last year and Challenge Cup this year. Stripping it 'retrospectively' doesn't make a difference. Of course if Wigan have to get rid of a few players because of the cap I'd be up for Warrington getting Richards and Tomkins.

Not sure what you're on about.



The SC rules say the gross value of image right payments is to be taken into account - see 5.6.7.

Either the payments are disclosed in their gross amount or they weren't - and if not, under the current system this would be a breach.

This is of course the current system. I think that 5.6.7 was introduced after this issue publicly came to light a year or two (?) ago (of course its been well known in RL circles for many years that certain clubs were using this to get around the cap....).

The question therefore is whether the RFL will rely on their "spirit of the cap" rule in relation to the breaches of 5.6.7 that occurred prior to this expressly coming in, or treat the misbehaving clubs more favourably than Wigan (whose spirit of the cap breach was arguably not even in breach of the spirit of the cap, whereas this is just cheating)...

You may also like to look for example at A3:1 in the main rules which places obligations on clubs in respect of PAYE and other obligations to HMRC... Even if clubs have declared the gross amount they will be in breach of this and possibly other rules for underpayment of tax. It will be very interesting to see if the RFL brings misconduct charges against the clubs concerned. I doubt they will, sadly, because the authorities have turned a blind eye to this for years and they can't really turn around now and punish the miscreant clubs.

It all just further discredits the CC. What a joke.

No club will be stripped of any trophies because its clear more than one club was doing this.

The RFL have not got the guts to sanction a group of clubs so it will be passed off as bad accounting not deliberately trying to break the cap. Well the image rights one may be brushed under the carpet like that but the EBT thing may be harder to disguise as an oversight.

Only Wigan deferred wages and had several other clubs done it (as they do in Oz) then it would have had to be let pass.

That isn’t what happened. The Image rights paid counted under the cap the same as a normal paid salary did. However less tax is paid on the proportion paid as ‘image rights’ as compared to the salaried amount. This difference in tax is what HMRC are trying to claim back. Theoretically the clubs would be well within their rights to attempt to claim this back from the players but practically that’s not going to happen.

Avoidance is legal and is merely about structuring your affairs to pay as little tax as possible within the law.

Evasion is deliberate non-payment of tax (including by the use of artificial structures which have no real commercial purpose and therefore breach the spirit (if I can use that word!) of the tax law).

I'm not clear on whether what has happened amounts to evasion but there has clearly been an underpayment of tax, so at best this is failed avoidance.

There will presumably be interest and costs on top of this, not a good result for the cap cheaters!

Edited!

I haven't read the article so didn't grasp what you meant. Apologies.

Yes, I understand fully. Im not arguing it wasn’t against the law, that’s what the court case is for. It being not against the rules also isn’t the point I am making. There is specific provision for clubs to make ‘assumptions’ about tax status and other issues which if accepted by the SC compliance team, and later found to be incorrect no action will be taken.

It isn’t allowed by the rules because it isn’t specifically outlawed in the SC rules, it is allowed by the rules because the rules allow it.

I doubt they will either but non collection of PAYE is a pretty serious offence. In salary cap terms the clubs won't have broken the cap because the image rights payments should have been counted as part of the the players salary cap value but if they failed to collect the PAYE on those payments it makes their cap go further as the players get to keep more of their wages. Who would you play for? A club that says it will pay you £100K and you will be taxed on the lot of it or a club who says you will get taxed on £50K of it with the rest tax free due to the money being paid for image rights?

What this boils down to is this for a £100K salary:

Club that collects PAYE in full then the player takes home £64,378.08
Club that does not collect PAYE on 50% of the wage then the player takes home £85,378.08



Yep but if several clubs have done this then the RFL won't act.