The government will tax image rights payments connected to employment as wages from 6 April 2028, a year later than first planned, raising £45m a year by 2029-30 against £10m in 2026-27, HM Revenue & Customs (HMRC) said.
The measure was announced at Budget 2025 and was due to take effect on 6 April 2027. HMRC said the delay was intended “to provide employers and employees additional time to adjust to this change”.
Image rights are not defined in UK law. They can broadly be described as the legal rights linked to the use of a person’s image, likeness or persona, HMRC said.
HMRC set out the expected yield to the Exchequer year by year. It is £10m in 2026-27 and £10m in 2027-28, rising to £40m in 2028-29.
The figure reaches £45m in 2029-30 and stays there in 2030-31 and 2031-32. The Office for Budget Responsibility has certified the figures.
The government will include the measure in Finance Bill 2026 to 2027. It will legislate so that all image rights payments connected to an employment count as employment income, subject to Income Tax and National Insurance contributions.
Employers will have to operate PAYE (the system through which employers deduct tax from pay) on these payments. They will also pay Income Tax and employer National Insurance contributions on them in the same way as for other employee wages.
The rule applies whether the payments reach the employee directly or through a third party. HMRC said an entirely separate arrangement with a third party would be unaffected.
HMRC said the measure is likely to mainly affect the professional sports sector. It said the arrangements are currently used mainly by a minority of employers in professional football.
The change will directly affect a small number of individuals whose employers pay part of their remuneration as image rights payments. Their treatment will be clarified so that this portion of pay is employment income.
HMRC said current law has no explicit reference to image rights. That has left uncertainty over whether arrangements are connected to the employment, and has led to inconsistent treatment by a small number of employers.
It said the change would improve the fairness of the tax system and reduce the risk of these arrangements becoming widespread in other sectors.
It said those who receive part of their pay through image rights should pay the same Income Tax and National Insurance as other employees.
Primary legislation will also introduce a power to make regulations achieving the same outcome for deemed employment relationships. Separate regulations using existing powers will apply a Class 1 National Insurance charge to these payments.
HMRC expects a negligible administrative impact on a very small number of employers, primarily in professional football. One-off costs would include familiarisation with the change and, in some cases, reviewing or amending contracts.
It does not expect any other one-off or ongoing costs or savings. It also does not expect significant macroeconomic effects, and it said there would be no operational impact on HMRC.
The government said it will keep the measure under review through communication with affected taxpayer groups.
The Budget 2026 overview of tax legislation lists the measure among those to be carried in Finance Bill 2026-27, alongside other changes affecting employers.
Among them is a requirement to report and payroll most benefits in kind through Real Time Information, which takes effect from 6 April 2028 for benefits other than company cars, vans, fuel and medical benefits.
Those four categories start earlier, on 6 April 2027.
