League: Tax clampdown to dash UK dreams

The annual exodus of league stars from New Zealand and Australia to the UK Super League could slow down because of a crackdown on loopholes by tax officials there - and could hit some already there in the pocket.

The news was partly behind Nathan Fien's decision to stay in the NRL when he comes off contract at the end of the season, and NRL clubs are warning players that they could be in danger of losing their tax-free lump sums.

At present, clubs have paid players up to 40 per cent of their salary into an offshore account under the guise of image rights. This has come under scrutiny from the Inland Revenue and moves are afoot to reduce this to only 10 per cent, meaning players will be taxed 90 per cent of their wages.

England's Rugby Football League have been asked to begin talks with the tax authorities on behalf of their clubs, but have denied speculation they will be forced to make retrospective payments and been slapped with six-figure tax fines.

There have been suggestions players will need to take pay cuts to finance this.

"There's no way Castleford, and Wakefield and Hull KR and these clubs are going to pay the Taxation Department the money and then not take it off the players," an NRL club chief told the Australian newspaper. "I can assure you of that."

That could have serious ramifications for some former NRL players playing in the UK - and, like Fien, could trigger decisions to stay put.

Fien's agent, Jim Banaghan told Rugby League Week that players would come "flooding back".

"Players never went there for the weather," he said. "Any manager with brains will keep his clients in the NRL system in this climate and not try to be too smart."

Fellow agent Frank Endacott, who deals a lot in the UK market, was more circumspect and said the issue of clamping down on image rights had been discussed for the past 10 years.

"If they bring it in, it could have a bearing on players going overseas but there will always be a case for players to go to the UK Super League," Endacott said. "There are other ways to skin a cat, like pension schemes and the EBT (Employment Benefits Trust). I don't think they will hit players retrospectively because the contracts were done in good faith. If you have done it properly and haven't abused the system, you

will be okay. But some have claimed image rights when they haven't warranted it."

The possible tax changes will mean good news for the NRL, which has struggled to compete financially with the Super League, as well as rugby union.

NRL chief executive David Gallop said the mooted tax changes, coupled with a reduction in the import quota and recent crackdown on visa restrictions, should help halt the overseas player drain.

"It's further evidence that playing in the UK is not the easy option it once was and it seems likely we'll see less players taking up a contract there," Gallop told the Australian.

The number of overseas players each club is allowed is being squeezed. At present, clubs are allowed seven overseas players but that will be six next season and five the season after that.

The Guardian reported that 10 of the 14 English Super League clubs could be targeted by Inland Revenue.

A leading player agent predicted a fight if a Super League club attempted to short-change a player to recoup its losses.

"I think some clubs will do that but contractually that won't bond," the manager said. "They're all going to try it but ultimately they've got to fulfil their obligations."

Among those well-known New Zealand players currently plying their trade in the UK are Francis Meli and Tony Puletua (St Helens), Sione Faumuina (Castleford), Brent Webb, Ali Lauiti'iti, Greg Eastwood (Leeds), Tony Martin (Wakefield), Paul Whatuira (Huddersfield), Motu Tony (Hull), Vinnie Anderson (Warrington) and Thomas Leuluai (Wigan).