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Premier League teams to suffer from tax change
Top English Premier League teams could lose out when recruiting top talent next summer, thanks to a change in UK taxation.
From April 2010 onwards, the basic income tax band will rise from 40 per cent to 50 per cent for those earning more than £150,000.
As a result, big-spending teams such as Chelsea, Manchester City and Manchester United may face wage increase demands of up to 70 per cent from existing players – and possible new signings – who want to offset the increase in the amount of tax they are liable to pay.
According to financial research company Deloitte, the change in tax laws will make the Spanish La Liga a much more appealing prospect for top European players, due to the lower Spanish tax rate. The top rate of tax in the country is currently 43 per cent for non Spanish earners.
However, the rise in income tax levels will not affect the majority of British teams when competing for talent with their European rivals as they may not be earning as much as players signing for the Premier League's "top five".
Peter Hackleton, senior manager at Deloitte's Sport Business Group, said: "Real Madrid has already spent a reported $200m on three players from other European clubs, but we have not yet seen an influx of talent to the Premier League. The reduced value of the Sterling against the euro and the proposed increase in tax are contributing factors to this".
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