Dave Craven: Benefits tax proving unfair burden on loyal servants

WHEN you command a staggering £8.8m a year, an extra £2.5m resorts to mere change.

But if your salary amounts to 130,000, another 100,000 on top makes a significant difference to your income. You can make sizeable plans.

The 2.5m is what Chelsea and – for the time being – England captain John Terry stands to reap from a potential testimonial match with Real Madrid later this summer.

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The 100,000 is what the highest earning Super League players could reasonably expect to claim from their benefit year.

The numbers are mind-boggling. At 170,000, Terry earns more in one week than Super League players can ever hope to over 12 months but why am I reminding you all of the obscene amounts of money Premier League footballers grab?

It is not just a cheap excuse to lay into Terry when he already has a few problems of his own, such as pondering if his next sponsorship deal will be affected by his alleged infidelities.

No. The subject of testimonials came up during Commons question time earlier this week when Leeds North West MP Greg Mulholland said he had learned fund-raising events for long-serving rugby league players would be taxed retrospectively. He labelled it "not acceptable." Hear, hear.

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With multi-millionaire footballers raking in extortionate amounts in recent testimonials, it is perfectly understandable why the tax man might have started looking a little deeper into these events and they, like all sportsmen and women, will feel the heat, too.

Apparently, the rules have always been in place but the government has, until recently, just not chosen to apply them.

Where trading exists, such as selling tickets for a testimonial match or benefit dinner, then corporation tax at 21 per cent can be charged.

Consequently, rugby league players who may have received 100,000 for their long service feats are now finding the tax men knocking on their doors asking for around 20 grand back. Harsh to say the least.

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Terry may have that bulging out of his wallet but the likes of Kevin Sinfield, Barrie McDermott and Sean Long are likely to have long since seen such cash swallowed up.

Whether the authorities persist in attempting to claw back this money remains to be seen but something has to be done to prevent it happening in future.

Unlike football, rugby league is a sport where earning power is governed due to the salary cap. It is not awash with money. Eating further into players' earning potential by then taxing their testimonial fund does not sit easily.

A bracket needs to exist, just like with any form of taxation, whereby at least the first 100,000 should be untouched.

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Many players, and this is true of footballers, too, already give a proportion of their proceeds to charity and, when the salary of an average Super League player is around 45,000, some common sense has to prevail.

Also, with the biting effects of the recession, testimonial committees for recent recipients such as Keith Senior, Eorl Crabtree, Richard Horne and Matt Diskin have found themselves having to show real creativity and endeavour to entice people into supporting their causes. Gone are the times where a simple golf day and a couple of dinners would see money come flooding in. Now players have to – quite literally with the RL Factor nights – sing for their cash. They need all the help they can get.

Indirectly, many players will also take into account potential testimonial benefits when they renegotiate contracts with clubs so seeing more than 20 per cent of that disappear can have major repercussions on their planning.

By all means, tax those footballers who employ marketing giants to drive their testimonial like a business, but allow others to enjoy the limited fruits of their less financially driven profession.