The Manchester United striker Wayne Rooney has failed in an attempt to force an apology over claims that he is paying only 2 per cent tax on some of his earnings.
Rooney complained to the Press Complaints Commission (PCC) over the accuracy of a story published by The Sunday Times in January describing attempts by players to avoid tax and headlined: "Top footballers dodge millions in income tax: Rooney pays 2% on some earnings."
The story reflected the way that tax inspectors are targeting some of the Premier League's highest-paid footballers over controversial tax arrangements that could be costing the Treasury more than £100m in tax liabilities.
The trend is for payments to be poured into player-controlled companies under the guise of "image rights" earnings. The tax rates on money taken out of those companies can be as low as 2 per cent.
Among those to have recruited top tax advisers to devise such schemes are Rooney, Gareth Barry at Manchester City and Theo Walcott at Arsenal.
The article claimed that 25-year-old Rooney – who signed a new £200,000-a-week United deal last October after suggesting his team-mates were not good enough – had saved nearly £600,000 by taking £1.6m in loans rather than as income over a two-year period. Rooney said the headline did not take into account that his company was subject to corporation tax of 28 per cent and argued that it would not be possible for any person to pay tax of 2 per cent on their earnings. The footballer also complained that the article failed to mention he had paid the loan back the following year.
The PCC dismissed Rooney's complaint. Stephen Abell, director of the PCC, said: "The commission's case law consistently makes clear that headlines – which are by their nature reductive – need to be read alongside the accompanying article. Although the PCC has upheld complaints in the past where there has been too great a disparity between the headline and the text of the article, this was not a feature on this occasion. As a result, the complaint was not upheld."
HM Revenue and Customs confirmed that under the complex tax structures often surrounding player-controlled image rights companies do allow those players legally to avoid paying the 50 per cent top rate of income tax on their earnings. Personal loans offered by limited companies – a perfectly legal tax mitigation device – do constitute a benefit in kind and thus incur a rate of only 2 per cent on the total sum of the loan.
This has been one of several battles between players and Revenue and Customs. Last October, The Independent revealed that some 75 per cent of Premier League clubs are now using a system known as employer-financed retirement-benefit schemes to allow players to avoid up to 50 per cent of income tax. This was one of the ways they circumvented the problem of losing out to clubs from the rest of Europe.