SCOTTISH MORTGAGE INVESTMENT TRUST
/ MANAGING YOUR MONEY /
chancellor Gordon Brown in a bid
to encourage film production in the
UK, a number of individual schemes
have recently been ruled illegal,
landing many former players with a
large tax bill.
Among these are Sir Alex
Ferguson and Sven Goran Eriksson
who invested in Eclipse Film
Partners 35, while 70 former
players including Gary Lineker,
David Beckham and Wayne Rooney
were hit with demands by HMRC
after they invested in a separate
scheme.
However, while Nelson says that
many footballers fell foul of these
schemes after putting their trust in
people who weren’t qualified to give
advice, Griffiths points out it hit
many people who went through the
correct channels.
GOOD FOR THE GOOSE
“Players went into these schemes
because of a general sense of what
is good for the goose is good for the
gander – these were backed by high-
level politicians and businessmen
and high-profile celebrities,” he said.
“These people received advice from
top law and accounting firms.”
“But some of these schemes had
bigger tail-end payments after they
had stopped playing and the money
had gone. They then went into a
mitigation strategy – so a lot of these
players got to 36 and realised they
had no income.”
Griffiths says that the number
of footballers getting caught out
in such schemes is likely to fall in
14
“A lot of these
players got to
36 and realised
they had no
income”
future, as regulation of financial
advisers becomes more thorough
and footballers become more
knowledgeable about the potential
pitfalls: the PFA is spending millions
of pounds in educating players and
now even apprentices are given
financial awareness workshops and
NVQs, while individual clubs now
have their own welfare officers.
However, he says the situation is
likely to become worse before it
gets better.
SITTING DUCKS
“When the Premier League first
came in and all that money came
flooding in at the inception, it is
the first lot of players who hadn’t
seen this before that became the
fall guys,” Griffiths continued.
“Because the HMRC is winning
more cases than it loses in court,
they can be hit with a big bill for
tax further down the line, so a
lot of people can get into a sticky
situation.”
“I am less worried about current
players because they receive so
much education – but a lot of former
players are like sitting ducks.”
NO FAULT OF YOUR OWN
But what does this mean to you?
While you may think you are
unlikely to succumb to the pitfalls
mentioned above, the point is most
former footballers run into trouble
after a sudden change in their
circumstances – and debt charity
StepChange says this is the single
biggest reason why people get into
financial difficulties.
“Often changes in your life
happen quickly and through no
fault of your own,” a spokesperson
for the group said.
“Whether you’ve lost your job,
suffered from ill health or you’ve
separated from your partner,
changes like this can mean that
you struggle to pay your household
bills and debts. According to our
research, 14 million people suffer an
income shock every year. Of these,
6.5 million turn to credit to cope,
which makes them 20 times more
likely to fall into severe debt.”
The charity says if you find
yourself in this situation, you
should work out how much you
owe and to whom. Next, work
out your outgoings and what you
have coming in before drawing up
a realistic budget you’ll be able to
keep to. Pay essential bills first, such
as rent/mortgage, before looking for
ways to boost your income.
It also recommends getting advice
– Nelson adds the sooner, the better.
“So many people put their head in
the sand. Don’t just hope that it will
all get better – because most of the
time it won’t,” she finished.
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