21 Feb 2013 16:18:47
Great work ed02.
Ed I know summer is a long way off but can u tell me do you see arsenal spending a lot of money means 70m to 80m. thanx.
Wajid {Ed002's Note - It is always best to avoid discussion about money as it tends to confuse people in terms of is it net or is it gross spending? Further, transfers are not simply the amounts of money you will see on some dumb website; there are additional costs and are these included - so are we including:
(a) Transfer fee - the big number including any levy applied by the local FA.
(b) Tax due on the transfer fee – typically this will be VAT (at varying rates across Europe) some or all of which should be reclaimable.
(c) Agent fees – this may be to one or more agents.
(d) Tax due on the agent fees – typically this is VAT at the local rate where the agent bills from – it is not reclaimable.
(e) Intermediary fees – this may be to one or more sponging leeches.
(f) Tax due on the Intermediary fees – typically this is VAT at the local rate where the Intermediary bills from – it is not reclaimable.
(g) Signing on fee to the player (possibly including non-reclaimable VAT if the player is VAT registered)
(h) Variables and tax on variables which may or may not be reclaimable) – these would typically include legal fees, moving/relocation costs, paying up insurance costs on the player, football association fees, signing on fee etc..
Additionally, does this figure account for any differential in wages between those leaving and those arriving?
However, I suspect that you will see significant changes over the next three windos to the playing squad. And that will take investment beyond what is gained from sales, and that will be forthcoming.
And never forget that other cost - What do you mean you have a super agent?}
Do Arsenal have a super agent?
Ed, if I were to ask this question I would mean if we needed 3 players, their prices were £20m each, would we spend that specific £60m plus whatever else? That's all people want to know. All the tax and all that goes on in the background.
Plus, why would we pay tax on a transfer? VAT? Does this mean if a player is £10m then actually we pay more like £12m? Either way it's not deal breaker stuff, it's what every single club has to do all we want to know is if you think we will do what it takes to bring several top players in?
All of you who think that Arsenal will spend in the summer will be dissapointed. Everytime we get a few bad results the "war chest" talk is leaked from the club to get the fans to get ripped off on season tickets once again. We will sell Sagna and probably Verm and buy if we are in the CL. If not we will save the money and decline a bit further.
Ed, if I were to ask this question I would mean if we needed 3 players, their prices were £20m each, would we spend that specific £60m plus whatever else? That's all people want to know. All the tax and all that goes on in the background.
Plus, why would we pay tax on a transfer? VAT? Does this mean if a player is £10m then actually we pay more like £12m? Either way it's not deal breaker stuff, it's what every single club has to do all we want to know is if you think we will do what it takes to bring several top players in? {Ed002's Note - All of this is answered above in terms of add on costs. However, taking your example, the tax due on three £20M (depending on local taxation) is £12M - some or all of which should be reclaimable. You also need to add agent fees - let's say 7% (another £7.5M), and VAT on agent fees that cannot be reclaimed (anther £1.5M). Then we have any intermediary fees, VAT on intermediary fees, the signing on fee, VAT on the signing on fee, the FA
If Wenger remains at the club, he will not spend £70million or anything like it. Last summer he sold 2 players for approx £42m & bought 3 for a similar amount, with no net spend.
Precisely Ed. that was going to be my next question - is it reclaimable.
No idea why my post came through twice but thanks for answering!
The vibe I seem to get when we ask these questions is that Arsenal are the only club unwilling to sign players due to tax issues. Why is it an issue for us? We earn it in tv and champs league money every year, how is it we can't sign players but Villa can? Why is it Arsenal FC going on about how much hidden costing there is in a signing? I don't see Newcastle or Chelsea going on about that nonsense? The club seems to be proud of operating like a business yet it seems reluctant to operate like a business when faced with simple fees that any other club would have to pay. and when some of the tax is surely reclaimable it makes you wonder why we're so stingy. {Ed002's Note - I explained what is and what is reclaimable in teh above post. The reason to avoid discussing money is that most fans struggle to understand (this is the box of rocks paradigm).}
'most fans struggle to understand'
Only the people asking, are the ones who struggle. The majority do understand, and also understand not to waste time asking.
Why is the tax non reclaimable if we are vat registered, no partial exemption and the cost is wholely, exclusively for business purposes?
Also, how are player additions and sales treated from a corp tax perspective?