County news December 1, 2015

Player benefits to be taxed from 2017

ESPNcricinfo staff

Luke Wright has recently completed a benefit season with Sussex © Getty Images

The Professional Cricketers' Association (PCA) has expressed its disappointment that sporting benefits will be subject to tax from April 2017, significantly reducing a source of income that senior county cricketers have used to ensure them some financial security.

While there will be a lower threshold of £50,000 put in place which will be exempt from tax - partly due to discussions between Her Majesty's Revenue and Customs (HMRC) and the ECB - benefits these days regularly top that figure.

Benefits have previously been free from tax as they have been classed as a form of gratitude since James Seymour, the Kent batsman, won an appeal at the High Court in 1927 against a case brought by the Inland Revenue on a sum of £939. They have generally been recognised as a reward for long service to a county and there is debate these days as to whether they should be handed to international cricketers supported by central contracts.

Jason Ratcliffe, the assistant chief executive of the PCA, said: "While we understand the minister's and HMRC's legal standpoint for these changes we are disappointed that income from sporting testimonials will be liable to income tax from April 5 2017.

"Last week's spending review made the first significant changes to the sporting testimonial regulations in almost 90 years.

"The PCA and England and Wales Cricket Board have been involved in discussions with Her Majesty's Revenue and Customs for some time and have been able to make representations which have helped to mitigate the impact of these changes by including the £50,000 threshold.

"It's especially disappointing that from 2017 players who commit their time to a lifelong career of cricket from a very young age, won't be able to benefit as many players have over the decades, or indeed for the cricketing public to demonstrate their appreciation and gratitude in the same way."

The recently released HMRC guidelines in a spending review state: "Following the consultation announced at Summer Budget 2015, the government will legislate to simplify the tax treatment of income from sporting testimonials. From 6 April 2017, all income from sporting testimonials and benefit matches for employed sportspersons will be liable to income tax.

"In addition, an exemption of up to £50,000 will be available for employed sportspersons with income from sporting testimonials that are not contractual or customary. This legislation will apply where the sporting testimonial is granted or awarded on or after 25 November 2015, and only to events that take place after 5 April 2017."

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