Autumn Budget hits image rights payments for sportspeople

While the headlines on the Autumn Budget have focused on changes to dividend tax, pension salary sacrifice and IHT, for professional athletes there was a new announcement that could have an even bigger impact. 

From 6 April 2027, all payments linked to image rights that are connected to employment will be taxed in the same way as ordinary employment income. This represents a significant shift away from the long-used model in which players and other public figures received commercial income through image rights companies, taxed under more favourable corporate rules.

Under the new approach, image rights payments that relate to employment are expected to be brought into the income tax and National Insurance (NI) regime. This will affect not only the individual receiving the income but also the employer, who may face increased costs due to employer NI contributions.

This is a new rule that could substantially increase tax liabilities for athletes and others with image rights income. One high profile example is Arsenal and England forward Bukayo Saka, whose image rights company declared income of £4.64 million in 2024.¹

Under these proposed new rules, the potential income tax on this amount would increase from the corporations tax rate of 25%, to the top marginal tax rate of 45%, plus 15% employer NI plus 2% employee NI for earnings over £967 a week.

While few athletes are able to generate this level of image rights income, it’s a change that will impact anyone currently receiving it.

Professional athletes and entertainers who receive image rights payments through companies will be among the most directly affected groups, particularly where these arrangements are closely tied to their employment.

Clubs and employers may also need to revisit and renegotiate contractual structures to reflect a higher tax burden. The impact may also be felt by commercial partners and sponsors, depending on how the final legislation distinguishes between employment related and independent commercial deals.

With some time before these changes come into force, it would be prudent for anyone with image rights arrangements to begin reviewing them now. Contracts and payment structures should be evaluated in detail to identify which elements may fall within the scope of the proposed rules from April 2027.

For employers, it may be necessary to revise remuneration models to account for higher overall costs. For individuals, it will be important to assess whether genuine third-party commercial endorsements can still be structured separately or whether a new approach is required.

Comprehensive tax planning will remain essential and there may still be opportunities to treat independent commercial deals in a compliant and efficient way.

In addition to the broader picture of how best to structure contracts and holding structures going forward, there are also steps affected people should consider, to assess and manage the impact on personal wealth.

1. Carry out a full review of your existing contracts, image-rights companies and income streams
2. Model different scenarios, including increased tax/NIC rates, revised gross income levels, employer cost increase and impact on net take-home pay
3. Seek bespoke advice. Given evolving legislation, bespoke tax and financial advice will be essential. At Evelyn Partners we can support clients (and their clubs/organisations) to re-shape remuneration and commercial-rights structures in compliance
4. Plan ahead. Use this window before April 2027 to negotiate favourable and sustainable arrangements, particularly if you are a professional sportsperson, entertainer or high-earning individual with complex income composition.

The upcoming changes mark a significant shift in how image rights income will be taxed, and anyone affected should ensure they understand the potential implications well before April 2027.

Taking early action can make a meaningful difference to both personal finances and future contract discussions. To talk through your situation and receive tailored guidance, speak to your usual Evelyn Partners contact or book an appointment.

¹ CityAM, Bukayo Saka: Arsenal star's image rights firm doubles earnings, 25 April 2025