Premier League players and managers heading to the new footballing wealth of Saudi Arabia will face tax bills worth hundreds of millions of pounds should they return to England before 2025, Telegraph Sport has learnt.
With stars such as Jordan Henderson offered deals thought to be worth £700,000 per week tax-free in the Saudi Pro League, seeing the full amount will rely on remaining in the Middle East for almost two years due to a little-known rule.
Those leaving the UK to work abroad must remain out of the country for a full tax year or they would be liable to pay 45 per cent on their earnings if they return before. It means the players joining the Saudi Pro League now must stay there until April 2025.
It rules out a quick jackpot for players who want to spend a season with the new major players in the transfer market then come back to resume their career in the Premier League.
The difference in earnings would be huge, with a £700,000 per week deal earning £58.8 million tax-free before the end of the next financial year, while paying tax on those wages would see £32.34 million taken home.
“Essentially, you need to be out of the country for a complete tax year,” said tax expert Elliott Buss, a partner at UHY Hacker Young. “If you left this month, which is past the tax year, so you need to start the clock in April 2024. It is not very well-known but is a question that arises a lot with sports people going abroad to play such as rugby players going to Japan.
“They are allowed to return back to the UK to see family as long as it does not exceed 91 days in a tax year. So it depends how long the season is and they need to be careful when they are coming back to remain having their tax-free status.”
While players are guaranteed the length of their contracts to stay at their clubs, the volatile world of coaching could see managers getting sacked but having to remain a resident of Saudi Arabia to avoid paying tax. So far Nuno Espirito Santo and Steven Gerrard are the former Premier League managers in the Saudi Pro League.
To get the full tax-free amount, players would need to “break UK tax residency” and become a Saudi resident to be under their 0 per cent tax. “If part of the attraction is paying 0 per cent tax then as a tax advisor we have to make sure they break UK residency as being 0 per cent doesn’t just apply by moving to Saudi Arabia,” said Sofia Thomas, partner at Juno Sports Tax.
“You can be resident in Saudi Arabia and resident in the UK, but for everything to go your way you need to be a non-UK resident and a Saudi resident, then you would be under their 0 per cent tax.”
There is a case from Italy where Mirko Vučinić, the former Juventus player, was successfully pursued for €5.85 million from the Italian authorities for earnings while playing for Al Jazira in Abu Dhabi. It was successfully argued that he never broke Italian residency while he played in the Middle East.
