Does anyone know how tax is applied to sell on fees? I'm assuming that, whichever amount is correct, a significant proportion will be claimed by HMRC?
flowchart":256otdu7 said:Does anyone know how tax is applied to sell on fees? I'm assuming that, whichever amount is correct, a significant proportion will be claimed by HMRC?
Quintrell_Green":r0wbnifc said:flowchart":r0wbnifc said:Does anyone know how tax is applied to sell on fees? I'm assuming that, whichever amount is correct, a significant proportion will be claimed by HMRC?
I do not think HMRC treat contracted players as stock in their balance sheets, quite like a shop keeper, but I do not know the detail. .
jimsing":2dlsogaf said:I would rather have kept the players, Emu, so that the £m came to us and not another club.
Saying that, we wouldn 't have been able to get those size transfer fees, just Argyle prices.
Mind you had we kept them we might not now be in the bottom tier of the English Football League, eh?
Ade the green":292dfz5a said:DrP78":292dfz5a said:SwimWithTheTide":292dfz5a said:Also aren't sell on clauses typically worked out as a % of profit rather than % of transfer fee?
Yes, in most cases it's a % of profit not the fee. It's likely any add ons will be exempt from the sell on clause too. Add-ons that Southampton negotiate won't be considered 'profit' but will be calculated in the reported fee.
Hence, it's a little too simplistic to think that it's 15% of the £5m.
Fair enough, but I can’t remember anyone quoting a £500,000 fee for him back when (as an example) and it’s more likely he went for £50,000 max so we’d still be talking 15% of all but £5m. Also, aren’t add ons to a third party (us) paid in full before Southampton gets to keep any of the transfer fee?
PL2 3DQ":1kixrlja said:This came up in 2017 when Gallagher was supposedly on his way to Aston Villa, at the time a Southampton fan, who seemed well informed said we are/were due .....
£75,000 up front
£50,000 on 17th birthday
£15,000 after first game
£50,000 after 10 games
£50,000 after 20 games
£50,000 after 30 games
£50,000 if he appears for England
£25,000 if he appears for Scotland
15% of profit sell on clause.
I'm not sure if that's true but seems plausible.
HC Green":b4yyi196 said:Quintrell_Green":b4yyi196 said:flowchart":b4yyi196 said:Does anyone know how tax is applied to sell on fees? I'm assuming that, whichever amount is correct, a significant proportion will be claimed by HMRC?
I do not think HMRC treat contracted players as stock in their balance sheets, quite like a shop keeper, but I do not know the detail. .
VAT @ 20% is applied to the transfer fee as it is regarded as a sale. Obviously clubs can claim it back but I doubt if the amount is part of the quoted fee by the selling Club but it might be by the buying Club.
Willis88":1i8hpsip said:HC Green":1i8hpsip said:Quintrell_Green":1i8hpsip said:flowchart":1i8hpsip said:Does anyone know how tax is applied to sell on fees? I'm assuming that, whichever amount is correct, a significant proportion will be claimed by HMRC?
I do not think HMRC treat contracted players as stock in their balance sheets, quite like a shop keeper, but I do not know the detail. .
VAT @ 20% is applied to the transfer fee as it is regarded as a sale. Obviously clubs can claim it back but I doubt if the amount is part of the quoted fee by the selling Club but it might be by the buying Club.
You're forgetting Corporation tax as it'll be treated as revenue and thus probably 100% profit. So, I'm not sure about the VAT treatment but HMRC will easily want 18% of the profit. Unless, of course, the club have sufficient losses to cover it (not too sure whether the buy-out of DA and the other transfers count)
Jimmyd":3mt2peky said:Willis88":3mt2peky said:HC Green":3mt2peky said:Quintrell_Green":3mt2peky said:flowchart":3mt2peky said:Does anyone know how tax is applied to sell on fees? I'm assuming that, whichever amount is correct, a significant proportion will be claimed by HMRC?
I do not think HMRC treat contracted players as stock in their balance sheets, quite like a shop keeper, but I do not know the detail. .
VAT @ 20% is applied to the transfer fee as it is regarded as a sale. Obviously clubs can claim it back but I doubt if the amount is part of the quoted fee by the selling Club but it might be by the buying Club.
You're forgetting Corporation tax as it'll be treated as revenue and thus probably 100% profit. So, I'm not sure about the VAT treatment but HMRC will easily want 18% of the profit. Unless, of course, the club have sufficient losses to cover it (not too sure whether the buy-out of DA and the other transfers count)
Only difference between the sale proceeds and net book value of the player would be taken to the P&L and therefore subject to CT i believe?
gaspargomez":1lgy010p said:Blackburn is a medium sized club, not much bigger than Argyle in my opinion. However, the club spends money like it’s water. Since Jack Walker’s millions and the parachute payments dried up it’s hard to see how all their expenses are being covered. I’d say Blackburn is a prime candidate for Administration, so if Argyle are owed money then they should try and get it paid ASAP !
At the recent Fans’ Forum, it was explained, under EFL rules, clubs are not entitled to divulge details of amounts paid or received in transfer deals.JannerinCardiff":thm1iytn said:Have we made any money from sell-on clauses for ex-Argyle players signing for clubs in this transfer window?
I.e
Sam Gallagher
Issac Vassell (long shot)