188ÌåÓý

A payment made to a player on entering into a contract as a professional Rugby footballer will usually be chargeable in full as employment income (see EIM00700). This is so even if the payment is said to be for “loss of amateur status�. Almost all major sports are now open to both amateurs and professionals, with the result that amateur status can no longer be said to have any real value.

In Jarrold v Boustead (41TC701) a payment to a Rugby League player for giving up his amateur status was held not to be chargeable to tax. That case was heard more than 40 years ago, when there was still a clear distinction between amateur and professional sport. The case is still relevant in so far as it demonstrates the general principle that a payment to a person on taking up employment is not necessarily from the employment (see EIM00710). However, it no longer has any direct relevance in relation to signing-on fees paid to Rugby footballers.

As regards signing-on fees to Rugby League players before 2 January 1996, see SE64165.

Conditional payments

In Riley v Coglan (44TC481) a Rugby League player received a signing-on fee for agreeing to serve the club for the rest of his football career. The payment was held to be taxable as employment income.

Conditional signing-on fees that are taxable in full on the Riley v Coglan principle include:

• sums payable on completion of a specified period of service, or after a specified number of matches. (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
• sums payable on the attainment of county or international honours
• such part of the signing-on fee payable on signature of the contract as is repayable by the player if he fails to complete his specified period of service, or to play a specified number of matches, or in any other circumstances referable to service.

Signing-on fee payable on a transfer

See EIM64115.