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12 de maio de 20232 minute read

UK FTT holds that Football agent’s fees for transfer of a Portuguese player to a football club in Italy are outside the scope of UK VAT

UK

Sports Invest (SI), a UK football agency, assisted in transferring a Portuguese football player from a Portuguese club to an Italian club in 2016. The Italian club paid SI for its services, while the player was not required to.

HMRC argued that SI provided services to the player for EUR3 million, subject to UK VAT, while only EUR1 million was for business-to-business services to the Italian club, outside the scope of VAT.

SI disagreed and argued that the EUR4 million was for services provided to the Italian club and not subject to UK VAT. SI also argued that even if the services were to the player, the place of supply rules for intermediary services applied, and the services were therefore outside the scope of UK VAT.

The UK FTT reviewed the contracts and evidence and concluded that SI provided services to both the player and the Italian club, but the services provided to the player were made for no consideration. The EUR4 million payment related to services provided to the Italian club and was subject to VAT in Italy. The Tribunal also agreed that even if the services were provided to the player and related to the payment, they could still be seen as intermediary services and deemed to be supplied outside the UK.

 

Key takeaway

This case yet again highlights the importance of retaining documentary evidence in the context of the economic and commercial reality.

Also, this a very fact specific judgement, and there is a likelihood of this being appealed by HMRC, as the result of this case is untaxed consumption of the agent’s services to the player having wider ramifications in the sector. It is clear that who makes the payment is very important, as if EUR1 million had been paid by the player, albeit reimbursed by the club, there would have been consideration moving from the player and UK VAT would have been due, subject to the intermediary rules.

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