what is capital gains tax then ?
Has this really becoming a discussion on tax in football?
Player trading does not trigger any capital gain, it is a revenue transaction. The selling club would pay corporation tax on any profit on a sale (based on the players accounting/ammortised value). A loss could also be made, reducing the tax liability.
Not sure on whether player sales are outside of VAT scope or not, but if not then the ultimate purchaser would pay the VAT. Clubs will be VAT registered so would claim back any VAT paid so it is only a cashflow implication, ultimately any VAT flowing from football tansactions is picked up by the fans on ticket sales etc.
VAT is charged on UK sales ie Carroll to Liverpool. Its different with sales and purchases outside the Uk. So where you could claim the VAT you paid on the profit/sale of Carroll against purchases of other players they have to come from the UK. Otherwise you can`t claim it against.
Ever filed a VAT return?
Yes why, I have a business turning over 500k plus a year ? Why not follow up your question with some information if your an accountant and I have worded my post incorrectly ?
Well if we have sold Carroll for £35m, we will have also charged Liverpool 20% VAT which we hand over to HMRC and Liverpool claim back (assuming VAT registered etc etc)
There's no question of 'charging' this against purchases etc, we would be a vessel for getting the VAT to HMRC in this transaction and nothing else
What ? Your now assuming the 35mill is an ex vat figure ? I was assuming the 35mill was Vat inclusive. Therefore after we give HMRC his 20% we would actually be left with 28mill. Yes its a very basic analysis of everything because we would need to know the whole accounts for that financial quarter. What I was trying to stress is just because you receive 35mill for someone doesnt mean you can go out and spend 35mill ? I don`t know quite what your going on about ? Liverpool would be VAT registered because its obvious to anyone there above the threshold for opting out ? Reading what you have written does not make any sense ?
Our competitors won't stop spending money over tax concerns though, so the point is moot.
True Wullie. All I have been trying to get across in this thread was that I don`t buy into this Mike Ashley is secretly robbing our cash conspiracy theory. I think its bollocks. I just got sick of reading posts about there being this 35mill in his pocket and lifes that simple. I`m no accountant but I do run a business and pay all the taxes that Ashley pays albeit on a minute scale compared. I have not got time to explain accounts to people either. All I know is if you sell something, in this case a player by the time you take your percentage which is the gross profit its usually f**k all compared to what you started with. You have to minus running costs,VAT,PAYE,NI and other taxes. Even paying someone a wage costs an employer money.
You say our competitors wont` stop spending over tax concerns ? Look what happened to Portsmouth.
http://www.bbc.co.uk/blogs/mattslater/2010/02/portsmouth_fc_in_crisis_qa.html
Also this website is quite interesting. Its a table of how much was spent by each club and what position they finished in over the past few seasons.
http://www.transferleague.co.uk/transfer-fees-v-league-positions/premier-league-2007-2011.html
I just think a lot of people are spending the transfer window worrying about weather we spend 35mill or not. Rather than looking at who we have brought in and who has finally gone. We are a better team already than last year or the year before or the year before.
Good stuff rebellious and I agree with all of that - in particular the looking at the squad rather than balance sheet line. The sad fact is though, that all logic withstanding, some fans and the media will use the 35m as a stick to beat the club with. That is in large part the club's fault because of all the rhetoric about the 35m being spent (in the months since the Carroll sale).
