For a professional athlete, they have enough demands on their time without having to worry about whether their agent is always doing the right thing for them.
There is no doubt that many agents do seek to act in the best interests of their athlete clients but there is a difference between hoping that they will do so and knowing that they will do so because they have an overarching obligation to do so.
This quite often comes in to focus when it comes to financials matters. An agent may believe that they are doing the right thing by their client but inadvertently create a major headache for them. Transfer fees and associated perks don’t just disappear into the background. Instead, they can, and often do, end up on an athlete’s P11D form. That’s where things get tricky. Accommodation, relocation costs, and performance bonuses are all typically found in a contract as perks for the athlete. If the agent doesn’t tell the athlete about them, and or doesn’t liaise appropriately with the athlete’s tax advisors then this can create an unexpected tax liability for the athlete that they never knew was coming… even worse, they are likely to face penalties and interest on top of that liability!
A similar issue can arise in the use by clubs of R&D tax credits. For clubs, mismanaging this isn’t just a paperwork headache. It can invite HMRC scrutiny, financial penalties, and reputational damage. For players, it can mean an unwelcome letter from the taxman months or even years down the line.
R&D schemes do have genuine applications in football. For example:
- Developing innovative training technologies.
- Creating advanced injury-rehabilitation protocols.
- Using data analytics to develop new tactical models.
These can qualify under HMRC’s rules if they involve overcoming genuine scientific or technological uncertainties. But routine training, standard injury treatment, or common use of analytics won’t pass the test.
The R&D debate is bigger than accountants and balance sheets. It’s a wake-up call for the entire football ecosystem. Whether you’re a sports director negotiating contracts or an athlete focused on performance, choosing the right advisor must now be a part of the conversation from day one.
What if there has been a deliberate omission by an agent though? There are numerous stories of professional athletes not being aware that their agents are making commission on certain deals – that should not happen…
The fiduciary duty – it does have to be said…
Athletes should have the right to assume that their agent will always act in their best interests and will never make a secret profit from their dealings. Sadly, that isn’t always the case.
In the recent Supreme Court decision of Rukhadze an others v Recovery Partners GP Ltd and another, the Supreme Court reviewed the law around equitable duties and fiduciary duties. A fiduciary is a person who has a legal or ethical relationship of trust with one or more persons, known as the principal(s). In a sporting context this would include an agent, as a fiduciary, representing an athlete, as a principal.
A fiduciary must account to their principal for any profit derived from or made out of the fiduciary relationship, save where the principal has provided their informed consent to the fiduciary retaining that profit. In a sports context a fiduciary will include an agent but will also include directors and partners in sports clubs as well as governing bodies and other entities.
Rukhadze confirms that it is prudent for fiduciaries to obtain informed consent from their athlete principals if they wish to retain profits earned. This sounds like common sense but often the relationship between athlete and agent can become murky. Not with us though…
At arch.law sports we always ensure that we maintain our fiduciary duty to our athlete clients by following the arch.law athletes’ charter as follows:
- maintain transparency: we always disclose all relevant information, including potential conflicts of interest or third-party incentives such as commission payments to our athletes;
- prioritise long-term interests: we don’t see our relationship as transactional with our athletes – we always consider their career path, financial stability and personal values;
- avoid self-dealing: it is paramount for us to ensure that personal benefits do not compromise or conflict with the athlete’s interests. As a fiduciary we will always remain loyal;
- no profit: as a fiduciary we will not make a secret profit from or by reason of our fiduciary office;
- act in good faith: we always act openly and honestly; and
- stay informed: we always understand and remain compliant with relevant laws, rules and professional codes to support our athletes.
Let’s also not forget that we are part of arch.law, which is the trading name of Arch Law Limited, a law firm regulated by the Solicitors Regulation Authority which places a far higher regulatory onus on us than most agents … but we see that as a good thing as it always ensures that we put our athlete clients’ interests first.
Useful information:
- More about Harry
