UK tax 'keeps top footballers out

English football clubs have missed out on a string of the world's best players, including Barcelona's Ronaldinho and Inter Milan's Luis Figo, because ministers refused to ease "draconian" tax rules, international tax specialists claimed yesterday.

Ronaldinho was destined for Manchester United and Figo was linked to Liverpool before Spanish and Italian clubs moved in with better offers.

Tax advisers at IFS said the continental clubs were able to offer improved deals because their governments allowed the wealthy to pay less tax. Also, more income can be held offshore, benefiting from cheaper tax rates in Jersey, Gibraltar or Liechtenstein. The firm said a player seeking net pay of £50,000 a week would need a £100,000-a-week gross salary in Britain compared with £66,000 in Spain.

Roy Saunders, IFS chairman, said: "It is no surprise that England lags behind Spain ... the current UK tax system is unattractive to high-earning sportsmen and is preventing the UK from luring and retaining talent. The impact on footballers ... is an effective tax burden of around 50% of gross salary."

Spain has dramatically cut tax rates in recent years, making it easier for clubs such as Real Madrid and Barcelona to cover wages and other perks compared with clubs in Britain, France and Germany.