Alistair Darling’s new tax plans are very bad news for the Premier League
As net pay decreases, so will top European talent
In order to pull the UK back from the brink of financial apocalypse, Chancellor of the Exchequer Alistair Darling has revealed some risky plans in his pre-budget report. One bail out strategy is to introduce a new tax band of 45 per cent on earnings over £150,000 from 2011. This seems like a perfectly reasonable method of keeping the economy afloat, but it could have an adverse effect on the Premiership.
Cristiano Ronaldo currently earns a gross of £6.24m per year, on which he pays 40 per cent on earnings after £37,400 (which is only around two days work for him!). Under the new plans, he will pay an extra £304,500, roughly the cost of one of his Rolls Royce Phantoms.
It’s no secret that there are plenty of mercenaries in the top flight: Ashley Cole argued the toss over £5k a week, Mathieu Flamini left Arsenal for an extra £50k a year, and Robinho signed for a completely different club on deadline day because they dangled a few extra notes in front of his eyes. The Prem’s top stars earn millions, but for them the bottom line is, well, the bottom line.
This problem is compounded by the current weakness of sterling: many European stars are paid directly into their continental bank accounts, meaning they have already lost thousands on through the exchange rate.
If the currency does not get any stronger and Mr Darling’s plans come to fruition, don’t be surprised to see big names flocking from the Premier League to countries where a larger chunk of their pay packet will go in their pockets.