Autumn Budget: Image Rights to Be Taxed as Earnings from 2027/28
The Autumn Budget confirmed a major change affecting sportspeople, influencers, entertainers and other public-facing individuals who earn money from their image rights.
From the 2027/28 tax year, payments received for image rights will be treated as taxable earnings, bringing them fully within the scope of income tax and National Insurance.
This measure forms part of a wider HMRC crackdown on arrangements that allow individuals to channel income through image-rights companies at lower tax rates.
What Are Image Rights?
Image rights relate to the commercial value of a person’s name, likeness, reputation or public profile.
These rights are often exploited through:
- Sponsorships
- Endorsements
- Licensing deals
- Advertising campaigns
- Commercial partnerships
Historically, many high-profile individuals — particularly athletes — have received part of their income through companies or separate contracts, with payments taxed differently from salary.
What Is Changing?
From 2027/28:
- Income attributed to image rights will be taxed as employment earnings
- This means full PAYE income tax and Class 1 NICs will apply
- The use of separate image-rights companies will no longer create a tax advantage
- HMRC will treat image-related income as part of an individual’s standard remuneration package
This brings an end to long-standing tax planning that separated image-rights income from salary.
Who Will Be Affected?
1. Sportspeople
Footballers, rugby players, tennis players, golfers, motorsport drivers and others who typically negotiate image-rights components within contracts.
2. Influencers and content creators
Individuals with commercial sponsorships, brand partnerships or paid social media exposure.
3. Entertainers and public personalities
Actors, musicians, presenters and performers earning through endorsements, advertising or merchandising.
4. Individuals using image-rights companies
Those who have historically received payments through corporate structures at lower tax rates.
HMRC has been reviewing such arrangements for several years — this Budget formalises its approach.
Why Is This Change Being Introduced?
The government aims to:
- Reduce avoidance opportunities
- Simplify the tax treatment of commercial income
- Ensure consistency across employment and endorsement earnings
- Increase revenue from high-profile individuals
- Close longstanding loopholes in the tax system
This is explicitly framed as an HMRC compliance and enforcement measure.
Impact on Individuals
Those affected can expect:
- Higher tax bills as image-rights income becomes fully taxable as earnings
- Increased NIC liabilities, especially for high earners
- Reduced ability to use corporate structures for tax planning
- A need to update contracts and commercial agreements before 2027/28
- Possible renegotiation of club, brand or agency deals
For many, this may significantly change how commercial income is structured.
Impact on Employers and Agencies
Clubs, agents, production companies and brands will also need to adapt:
- Contracts must reflect that image-rights payments are now treated as employment income
- PAYE obligations may apply to payments previously made outside payroll
- Professional sports clubs, in particular, may need to restructure remuneration packages
- Sponsorship and licensing deals may need revisiting
- Additional employer NICs may arise on previously exempt income flows
The changes could affect contract value, overall remuneration strategy and commercial planning.
Planning Considerations Before 2027/28
1. Review existing image-rights contracts
Ensure they remain compliant once the new rules come in.
2. Assess the financial impact
Estimate increased tax and NIC liabilities for both individuals and employers.
3. Consider restructuring remuneration
Where possible, adjust the balance between salary, bonuses, commercial payments and intellectual property arrangements.
4. Keep documentation clear
HMRC will scrutinise any arrangements designed to artificially separate employment income from commercial value.
5. Seek professional advice early
Waiting until 2027 could leave individuals with limited planning opportunities.
Summary
From 2027/28, image-rights income will be taxed as standard earnings.
This represents a major shift for sportspeople, influencers and entertainers, and is part of a wider HMRC crackdown on income-shifting structures.
Those affected should begin reviewing their contracts, commercial deals and remuneration structures now to prepare for higher tax liabilities and new compliance obligations.
