Sports Testimonial Tax Treatment UK 2026

A testimonial (or benefit) year or match is traditionally held to recognise a long-serving player's career, typically organised by an independent testimonial committee rather than the player's club or employer, raising funds through events, sponsorships and donations that are then paid to the player as a form of recognition for their service and popularity.

Up to £100,000 of proceeds from a genuine, non-contractual testimonial can be received free of income tax and National Insurance under a specific statutory exemption (Income Tax (Earnings and Pensions) Act 2003, broadly referred to as the testimonial exemption). Proceeds above £100,000 are taxable as employment income.

The testimonial must not be something the player is contractually entitled to as part of their employment terms — it must be a discretionary event organised (typically by an independent testimonial committee, not the employing club itself) to mark loyal service, rather than an automatic benefit written into a player's contract. If a testimonial is guaranteed by contract after a set number of years' service, HMRC may treat it as ordinary taxable employment income rather than a genuinely discretionary testimonial.

Using an independent committee (rather than the club itself organising and controlling the event) helps demonstrate that the testimonial is a genuine, discretionary recognition of the player by others — including supporters, sponsors and the wider football or cricket community — rather than a disguised form of contractual remuneration from the employer, which is central to satisfying the exemption's conditions.

The excess above £100,000 is generally taxed as employment income at the player's marginal income tax rate for the year it is received, in the same way as any other employment income above the Personal Allowance and through the relevant tax bands (20%, 40%, 45%).

The £100,000 exemption covers National Insurance as well as income tax for the qualifying, non-contractual portion. Any amount above £100,000 that is taxable as employment income would generally also attract National Insurance in the normal way, since it is treated as employment income for both tax and NI purposes above the exempt threshold.

Yes, testimonial funds are often held and administered through a trust structure by the independent committee before being paid to the player, which can help with the practical administration and governance of testimonial proceeds, but the underlying tax exemption rules (contractual vs discretionary, the £100,000 cap) apply regardless of whether a trust is used to hold the funds in the meantime.

The statutory testimonial exemption is not limited to a specific sport — it can apply to any sportsperson (or, in principle, potentially other long-serving employees where a genuine, non-contractual testimonial-style event is organised), though it has historically been most associated with football and cricket, where testimonial culture is longest established.

Clear records showing the testimonial was organised independently of the employer, was genuinely discretionary rather than contractually guaranteed, and a full account of proceeds raised through different events, sponsorships and donations, are all valuable in the event HMRC queries whether the exemption genuinely applies — proper governance and record-keeping by the testimonial committee protects both the player and the committee's own position.