20 May 2017 11:58:00
Hi Eds, just a quick question and it might be a really stupid one, but do clubs have to pay a portion of a players transfer fee to the government as tax, or is it all done at the end of the financial year as a collective?
Thanks guys.

{Ed002's Note - Only VAT, but it might be an apt time to explain again about the cost of transfers (excluding wages). What is paid by the buying club would typically include:
(a) Transfer fee - the big number.
(b) Any levy applied by the local FA – 5% for the EPL.
(c) Tax due on the transfer fee – typically this will be VAT (at varying rates across Europe) some or all of which should be reclaimable.
(d) Agent fees – this may be to one or more agents (as an example, Liverpool have spent £40M plus VAT on agent fees over the past three years leading to this window).
(e) Tax due on the agent fees – typically this is VAT at the local rate where the agent bills from – it is not reclaimable.
(f) Intermediary fees – this may be to one or more sponging leeches (what do you mean you have a super agent?) .
(g) Tax due on the Intermediary fees – typically this is VAT at the local rate where the Intermediary bills from – it is not reclaimable.
(h) Signing on fee to the player (possibly including non-reclaimable VAT if the player is VAT registered).
(i) Legal fees.
(j) VAT on legal fees which is reclaimable.
(k) Moving/relocation costs for the player.
(l) VAT on moving/relocation costs which is reclaimable.
(m) Paying up insurance costs to the selling club (sometimes waived).

What is paid by the selling club would typically include:
(a) If the player is under 24 and moving between different football associations, a Solidarity contribution paid to his previous clubs responsible for his training - this is 5% of the transfer fee received (apportioned 5% of the contribution for each year from the season of his 12th birthday to the season of his 15th birthday and 10% of the contribution for each season from his 16th to 23rd birthdays).
(b) If the player moves to a higher category club (all clubs being categorised 1 to 4) then Training Compensation is due for the period of age 12 to 21. Compensation is due to all clubs when the player turns from amateur to professional and thereafter only when he moves from his final training club to another club. The initial training compensation is levied at the training costs associated with Category 4 clubs. The subsequent figure is agreed between the sides or tribuneral if necessary.
(c) Any monies owed to the player if he did not request a transfer – again this is 5% of the transfer fee received.
(d) Any monies owed to the player in terms of his contract (typically outstanding owed wages (not future wages) and bonuses).
(e) Any money contractually due to a previous club as the result of a sell-on clause.


1.) 20 May 2017
20 May 2017 12:14:47
Thanks Ed. Very well explained.

Hope we get one more win.

Cheers.


2.) 20 May 2017
20 May 2017 12:47:39
Damn, thanks Ed, I can see now why you don't like discussing financed. Thankyou for that detailed explanation.


3.) 20 May 2017
20 May 2017 13:56:49
Very much appreciated Ed002. Very interesting and helpful.

{Ed002's Note - You are welcome.


4.) 20 May 2017
20 May 2017 14:09:33
Considering the amount of money given to agents, why don't the Premier and Football League clubs form a cartel and refuse to pay them for transfer deals? If they work for the grossly overpaid player, let that player pay the agent who is working for them.

That's what happens in normal employer / employee relationships, so what's so different here?

Maybe I'm bring simplistic but these amounts saved could subsidise ticket prices.

I understand that clubs need agents when they have players they want to sell touted around to other clubs and in that case the club could pay them an agreed % fee based on the value of the eventual transfer fee.

I realise I'm probably going to get slated by one of the EDS for this, saying that I know nothing. I can take that on the chin as long as they explain why my suggestion can't happen as I bet there are a lot who agree with me.

{Ed002's Note - The Premier League and Football League do not employ players nor do they pay agents. Agents are paid for by the clubs. If clubs do not wish to pay agents that is fine - obviously it would very much limit the players available to those clubs.}


5.) 20 May 2017
20 May 2017 19:10:59
Appreciate the detailed response ed002 😍
It's obscene the amount of money swilling around in the game. 😲.