Taxman hits testimonials
The devil is always in the detail in George Osborne's budgets and he is a past master at inventing stealth taxes that initially attract little attention, although he got it badly wrong with the pasty tax.
This time he has decided to tax testimonial matches for footballers (and other sportsmen and women). A testimonial match at a top club can net £1m. In addition, there are usually associated events such as black tie dinners with over priced seats and auctions.
Wayne Rooney will have a testimonial at Old Trafford next summer and if the stadium sells out he could raise at least £2.3m. He has said he will donate the proceeds to children's charities and it is increasingly common for top footballers to give all or part of the proceeds to charity. It can then be offset against tax as gift aid, recouping 25 per cent for the highest rate of taxpayer (20 per cent goes to the charity).
The new rules will apply from 2017. Testimonials began when players where either amateurs or limited to the maximum wage. The proceeds from a testimonial could enable them to set themselves up as a publican (a popular choice) or a newsagent when they retired. In the former case, of course, there was always the temptation to drink the proceeds.