Page last updated at 11:14 GMT, Friday, 17 July 2009 12:14 UK

Tax rise 'to hike footballer pay'

Cristiano Ronaldo
Cristiano Ronaldo will pay lower tax in Spain than he would have in England

English Premier League clubs may face higher wage demands from European players due to sterling's weakness and the new 50% tax rate, a report said.

Offers to transfer targets and existing players may need to be raised to match the take-home wages offered by European rivals, consultants Deloitte added.

Deloitte said giving a European player a net annual salary of 3m euros (£2.6m) would cost an English club 6.8m euros.

But a Spanish club needs only pay 4m euros to deliver the same net salary.

The UK figure is also higher than clubs in France (6.7m euros), Italy (5.7m euros) and Germany (5.4m euros) would have to pay, according to the Deloitte calculations.

"The summer transfer window opened over a month ago, but Premier League clubs are yet to make significant acquisitions from overseas," said Pete Hackleton, senior manager in the Sports Business Group at Deloitte.

"The reduced value of sterling against the euro and the proposed increase in the top rate of income tax are contributing factors to this."

Revenues advantage

The pound is currently worth about 1.15 euros compared with 1.50 euros, two years ago.

And from April 2010, the tax band for top earners in the UK will increase from 40% to 50%. This will impact the vast majority - if not all - top-flight players.

The concern is for the biggest clubs competing for the best talent, where the reduced tax rate in Spain gives the likes of Real Madrid and Barcelona a significant advantage
Pete Hackleton
Deloitte

Some big European clubs have proved willing to spend, with Spanish side Real Madrid having reportedly splashed out about 200m euros on three players from other big European Leagues - Cristiano Ronaldo, Kaka and Karim Benzema.

Ronaldo, who left Manchester United for Real Madrid, will be paying tax at a non-residents rate of 24% in Spain, as opposed to the 50% bracket he would have faced had he stayed in the Premier League.

"The concern is for the biggest clubs competing for the best talent, where the reduced tax rate in Spain gives the likes of Real Madrid and Barcelona a significant advantage in attracting the best players in the world," Mr Hackleton said.

But he added that high revenues enjoyed by Premier League clubs meant the league could still afford the world's best players.

Total Premier League revenues were the equivalent of 2.44bn euros in 2007/8, more than 1bn euros ahead of Spain's La Liga. The difference is largely driven by the sale of the lucrative television broadcast rights which are then split between the clubs.



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