Answers · UK 2025/26

How is image rights income taxed for sportspeople and celebrities in the UK?

Image rights income in the UK is fully taxable. Sportspeople and entertainers often channel image rights through a personal service company taxed at corporation tax (25%). Profits distributed as dividends attract further personal tax. HMRC scrutinises image rights arrangements closely and requires evidence that the company genuinely owns and exploits a commercially valuable right.

Last updated: 30 June 2026Last reviewed: 30 June 2026How we verify

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Image rights refer to the commercial value of a person's name, likeness, signature, or personal brand. For high-profile sportspeople and entertainers this can represent a substantial income stream -- sometimes comparable to their employment earnings. **Why use a company structure?** Historically, image rights were channelled through a personal service company (PSC) or partnership to benefit from: - Corporation tax at a lower rate than personal income tax - Ability to retain profits in the company and extract at a time and rate of the individual's choosing - Separate treatment from employment income In 2026/27, corporations pay tax at **25%** (or 19% if profits below £50,000). Compared to the 45% additional rate or 40% higher rate, this can produce significant savings at the corporate level. **HMRC's position** HMRC has challenged many image rights arrangements, particularly where: - The split between employment income and image rights income appears contrived (e.g. 50/50 with no commercial basis) - The company has no genuine substance -- no staff, no active exploitation of the image - The fee paid to the company is not arm's-length (not what an unrelated third party would pay) - The income flows back to the individual immediately as a loan or dividend HMRC guidance makes clear the commercial value of image rights must be genuine and demonstrable. **Correct tax treatment** Where a properly structured image rights company exists: 1. Third parties pay the company for use of the image rights (merchandise, appearances, endorsements) 2. Company pays **corporation tax at 25%** on profits 3. Individual extracts profits as **dividends**: £500 allowance, then 8.75% (basic), 33.75% (higher), or 39.35% (additional) 4. Alternatively, salary drawn from company attracts PAYE and NI **Employer NI risk** If HMRC reclassifies image rights payments as disguised employment income, full PAYE and employer/employee NI would be due, plus interest and penalties. **Practical advice** Anyone receiving significant image rights income should take specialist advice to ensure the valuation and structure is defensible and that the company genuinely manages and exploits the rights commercially.