- The sports sector, especially football, has faced increasing legal disputes over tax compliance, notably in VAT obligations.
- The Sports Invest VAT case focuses on the VAT liability of agents’ fees related to player and club transactions.
- The UK First Tier Tribunal ruled in favor of Sports Invest, aligning with recent HMRC practices regarding agents’ fees VAT treatment.
- HMRC has shifted from a 50/50 apportionment model to recognizing that fees paid by clubs are solely for services to the club.
- In this case, UK VAT was not applicable to the fees charged to the club, although it would have been chargeable if a UK club was involved, with full recovery available to the club.
- The ruling emphasizes the need for clubs to document agent engagements thoroughly to support VAT recovery claims.
- Clubs can potentially reassess past dealings with agents based on this decision to claim under-recovered VAT on agents’ fees.
- The case involved Sports Invest, a UK sports management company, claiming that its services to an Italian club during a player transfer were outside UK VAT scope.
- Historically, clubs have struggled to recover VAT on agent fees, as these were often seen as services to both players and clubs.
- The legal argument centered on whether services were supplied to the club or the player, with Sports Invest asserting its fees were solely for the club’s benefit.
Source: haysmac.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
