Cristiano Ronaldo and Mohamed Salah will reportedly earn an additional £1.3m a year following new tax cuts and social security cuts announced by the government.
The UK government has announced that it will cut the top tax rate from 45% to 40%. This would sound like music to the ears of a Premier League footballer.
According to The Times, big stars already raise an average of £4m a year after tax, but tax cuts and changes to social security are set to increase that amount.
One of the biggest beneficiaries of the cuts outlined in Prime Minister Kwasi Kwarteng’s mini-budget is Manchester United superstar Ronaldo, who reportedly earns £400,000 a week at Old Trafford.
Top players receive an average of £4 million a year, a figure that is set to increase like Ronaldo and Salah
Kieran Maguire, an author of Football Finance, claims the Portuguese captain will see a net profit of more than £1 million as a result of the change, stating, “Cristiano Ronaldo’s take home will increase by roughly £1.3m over the course of 12 months, which is a lot of money.”
Mohammed Salah, who earns the same annual salary as Ronaldo at Liverpool, is also set to earn another £1.3m over the next 12 months.
Manchester City midfielder Kevin de Bruyne takes home £385,000 a week.
His new teammate Erling Haaland and Manchester United goalkeeper David de Gea will be paid £375,000 a week, which is an additional tax rate of £900,000.
Tottenham striker Harry Kane, who is on a £200,000-a-week contract, could expect a £480,000 increase a year on the same terms.
The average net salary of his players in the Premier League is now believed to have risen by almost £240,000 a year, making his flight to the top of England an even more attractive destination for overseas talent.
Premier League players spent £1.4 billion in direct taxes in the 2019-20 season, according to a study by accountants EY. Recent government cuts are expected to reduce this figure by around £70m in the coming years.
The Premier League doesn’t have a special tax system for foreign players like Italy or France, but it already pays the highest average salaries in European football.
Italian tax law allows for the tax exemption of his first 50% of his salary for a period of five years if a foreign player has a contract of at least two years. The highest tax rate in the country is 43%.
In France, a foreign recruit he can only pay 27%.
Spain recently ended tax exemption for players, with a top tax rate of 47%. This varies by region, but in Germany, the tax rate is 45%.
Saif Rubie, a top football agent who regularly covers international transfers, believes Britain’s tax cuts will only encourage foreign players to advance to the Premier League.
Rubie stated, “The Premier League is now the leading league in the world as far as its wealth across the board [goes] and this extra incentive with taxation I’m sure will make it more attractive.”
“However in countries such as France and Italy, they make even bigger allowances for foreign players coming into the league so the top clubs there can still make very attractive offers to players.”