Saudi Arabia PIF purchased an 80 per cent controlling stake in Newcastle United in October 2021.
In June 2023, Saudi Arabia PIF then bought majority 75 per cent stakes in Saudi Pro League clubs Al-Ittihad, Al-Ahli, Al-Nassr and Al-Hilal.
This was announced as part of a much wider major investment in domestic Saudi football, to try and help spark a rise for it (Saudi Pro League) to become one of the top ten leagues in the world, with also it being part of their even wider plan, to host the World Cup in Saudi Arabia.
However, to others, the only reason for this astonishing huge investment in their domestic football in summer 2023, by Saudi Arabia PIF, was to actually benefit Newcastle United. That the spending of a billion and more pounds on these Saudi clubs and subsequent investment in players and wages, was just so Newcastle United could get players on cheap deals arranged by Saudi Arabia PIF, to get around FFP limitations.
Yes, some people actually believed this. A bit like others who truly believe that the earth is flat, or even others who believe that Sunderland is as big a club as Newcastle United…
Anyway, back to Saudi Arabia PIF and their cunning plan, spending over a billion pounds just so Newcastle United might be able to get some cheap loans in this January window.
It was repeatedly said along these lines about how ‘Newcastle United and Saudi Arabia PIF will cheat the system, sort all these free loan deals for star players to come in from the Saudi league in January to help them…’
The four Saudi Pro clubs that the PIF have 75 per cent stakes in, are Al-Ittihad, Al-Ahli, Al Hilal and Al Nassr.
Despite Newcastle United still regularly missing 10 or more of their first team squad for recent matches, we are ten days into the window and yet not a single loan player parachuted into St James’ Park from another club with Saudi Arabia PIF ownership.
Funny that.
Absolutely embarrassing all the journalists who invented stories, claiming they had knowledge that Newcastle United were definitely planning on bringing in Ruben Neves or whoever.
Anyway, a new report has given key background information, yet more proof surely as to why supposed Newcastle United January signings from other Saudi Arabia PIF clubs was always a complete joke.
The new report comes from The Athletic and is excellent.
What has prompted this specific article are claims that Jordan Henderson is supposedly unhappy with life / football in Saudi Arabia and would ideally like to come back to England and the Premier League.
What this report from The Athletic has looked at, are the tax implications for Jordan Henderson or any other player who left the Premier League for Saudi Arabia this summer, if they wanted to make a swift return, even if on a loan deal….
‘The wages on offer in Saudi have tempted many players out there. But for those wishing to return to the UK early, there are tax implications they will have to consider before packing their suitcases to return home.’
‘No income tax is levied on footballers’ salaries in Saudi Arabia, compared to a combined rate of at least 47 per cent of UK income tax and National Insurance contributions for earnings over £125,140 per year in the UK.’
‘If you are leaving the UK to take a full-time job elsewhere, such as playing full-time for a Saudi Pro League club, then you should become a non-UK tax resident from the day you leave, meaning anything you earn in Saudi from the date you leave should be tax-free.
But that only works, says tax expert Pete Hackleton, if you properly break your UK tax residence. “What the rules say is that, to get that split-year treatment, so that you’re non-resident from the day you leave, you have to leave the UK for the rest of that tax year and for the whole of the following tax year.
“For players who moved in the summer of 2023, that means they need to be out of the UK past April 5, 2024 and then for the whole of the next tax year, so until April 5, 2025.
“If you go out there and you’re earning $20million a year, tax-free and you’re out there for a year and a half and then come back, you might not realise that actually that $30m might be rolled back into the UK tax debt because you weren’t out for a full tax year.”
The difference in earnings would be huge.’
‘..the likes of Henderson, who are seeking a route back to the UK full-time, or managers who are fired and decide to come back to the UK, there will be an almighty tax bill to face.
What about loan moves?
Players could be left with the same problem even if they return to the UK on a loan deal because they still might not have broken UK tax residence.
“If you come back too soon you could be pulled back in and will effectively be treated as a continuing tax resident,” says Hackleton.
Conclusions:
This new article massively backs up just how ridiculous these claims of what was happening in Saudi domestic football, was all just some big cover that would then facilitate super cheap loan deals to help Newcastle United.
As this article from The Athletic makes clear, if players who left for a club in Saudi Arabia in the summer, came back to the Premier League this month, even on loan, they will get absolutely hammered on tax.
Which seen as money was 100 per cent the reason all of these players went to Saudi Arabia, means a quick move back to an English club would make zero sense.
The article makes clear that some players could be as much as tens of millions of pounds worse off, if they come back to England to play football within two years of having left, never mind a few months!
This report goes on to say that then if players did come back and face these massive tax bills, then the likelihood is that the players would then look to their Premier League to compensate them for the huge amounts of tax they would be then having to pay. so in actual fact, doing loan deals for players from these Saudi Arabia PIF clubs would be ridiculously expensive, rather than on the cheap!
Put it this way, even if you ever thought there was any truth at all in supposed January loan deals for Newcastle from other Saudi Arabia PIF owned clubs, then surely now you can see just how far-fetched the made-up NUFC transfer stories actually were?
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