PCC rejects Wayne Rooney's complaint over tax story

The Press Complaints Commission has ruled that the Sunday Times did not breach the Editors' Code of Practice in an article about the amount of tax paid by Premier League footballers.

The front-page article claimed that "dozens of top footballers" were "avoiding millions of pounds in tax" using "complex tax avoidance schemes".

The PCC investigation followed a complaint by Manchester United and England forward Wayne Rooney, who was said in the article to have saved £600,000 in taxes by taking £1.6 million from the club in loans rather than as income.

Rooney complained to the regulatory body that the headline on the article – "Top footballers dodge millions in income tax: Rooney pays 2 per cent on some earnings" – was inaccurate and misleading given that the loans from the club were already subject to 28 per cent corporation tax when the money went from the club to his limited company. He also pointed out that he had paid back the loan the following year, which the article failed to mention.

Tax law entitles players to take loans from their clubs through a limited company, meaning they pay corporation tax of 28 per cent instead of the normal income tax rate of 50 per cent. Players can then take a loan from that limited company – regarded as a "benefit in kind" – on which they can pay just 2 per cent tax.

If the loan is not repaid to the club within nine months of the end of the year in which it is taken, the player would be forced to pay an additional 25 per cent of the outstanding loan in corporation tax.

Rooney lodged complaints with the PCC under clause 1, which states that the press "must take care not to publish inaccurate, misleading or distorted information", and clause 2, which states that "a fair opportunity for reply to inaccuracies must be given when reasonably called for".

The Sunday Times defended its article, claiming that the way Rooney had structured his loans from the club, although completely legal, had allowed him to pay just 2 per cent tax on some of the money. It also argued that the headline was not misleading, claiming that readers would reasonably understand that the article would explain the details of the arrangement.

The PCC acknowledged that the headline did require further explanation, stating that the 2 per cent figure "could not explain the complexity of the complainant's tax affairs", but ruled  that the details of the arrangement were adequately explained in the article and another article in the same edition.

The judgement states: "The articles made clear that not only was the arrangement legal, but that the money – which had already been subject to corporation tax – was a director's loan in respect of which tax was paid.

"They also made clear that it was likely that the loan would have to be repaid. In any case, the newspaper offered to make clear that Mr Rooney paid all his taxes at the legally required rate, which the Commission considered to be a 'sensible and proportionate' response. As a result, clause 2 (opportunity to reply) of the Code was not relevant."

The PCC also decided that the repayment of the loans was irrelevant, given that Rooney had "had access to large sums of money which had only attracted a tax rate of 2% for the period of the loans".

The Sunday Times agreed to print a clarification stating that Rooney's tax arrangements were entirely legal, but the PCC found against his player's request that the paper state the 2 per cent claim was misleading.

Stephen Abell, director of the PCC, said: "This was a complicated financial arrangement and it was important for the Commission to consider the circumstances in full. The Commission's case law consistently makes clear that headlines – which are by their nature reductive – need to be read alongside the accompanying article.

"Although the PCC has upheld complaints in the past where there has been too great a disparity between the headline and the text of the article, this was not a feature on this occasion. As a result, the complaint was not upheld."

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