§ Mr. BlizzardTo ask the Chancellor of the Exchequer if he will list the criteria used to determine whether proceeds from footballers' testimonial events are regarded as taxable income; and if he will extend the criteria to increase the tax liability on this revenue for full-time professional footballers. [31852]
§ Dawn PrimaroloIf proceeds from a testimonial match are connected with the termination of a footballers' employment they are taxable if they exceed a £30,000 exemption limit.
And if a footballer becomes entitled to a testimonial after a specific period of service to a club, or under an agreement made with the club on signing, the proceeds may be taxable in full as income from his employment.
But if no such entitlement exists and a testimonial match is organised by a testimonial committee on the individual's behalf, rather than by the employer, the proceeds do not come from his employment, but from individuals marking their esteem for the individual's personal qualities or general contributions to the game. These payments are of a personal nature and are not therefore taxable in the same way that other gifts are not taxable.
We have no current plans to change the tax treatment of footballers' testimonial payments. However, we keep all aspects of the tax system, including this one, under regular review.