In the current global environment, the popularity and impact of sport and entertainment holds a great appeal not only for the watching public but also for multinational companies looking to expand their businesses. The emergence of lucrative markets in the Middle East and Asia has contributed to the popularity, as global businesses attempt to utilise the popularity of sportsmen and entertainers to endorse their products. Often individuals, or in some cases their sports teams, are being paid large sums by companies for the use of their face or name in their advertising campaigns. Without any tax planning, the receipt of endorsement income is taxable on the individuals at a rate of up to 45%.
By seeking tax advice, the individuals can reduce the immediate tax paid on any endorsements received from 45% to 0%. Where the career of an individual is often much shorter than many other careers, the maximisation of wealth in those years is an important consideration. Furthermore, by carefully managing image rights, an individual’s brand can continue to earn endorsements after she or he has retired from sport.
At Mark Davies & Associates we can advise sportspeople and entertainers on how they can structure their image rights in order to maximise their overall wealth. We understand the UK tax rules on image rights and have experience in dealing with HM Revenue and Customs in critically analysing how image rights structures can be put in place and run within the scope of UK tax legislation. Our services can enable a sports person or entertainer to minimise taxes payable on endorsement income and reduce the risk of being pursued by HMRC in the public domain, which would detract from the value of their image. We can also advise on registering an image in order to protect its capital value from being exploited by other, non-licenced persons.
For more information on the tax implications of Image Rights for sports people please contact us here.