Establishing a career as a rugby player involves a lot of hard work on the pitch. Training and performing well when it matters will help you get noticed. However, to make the most of opportunities and progress in your career, having a good agent on your side is crucial.
An agent will negotiate contracts and help you secure a higher salary. They can also represent you off the pitch, helping you source brand contracts and find alternative income streams.
As they will play an important role in your career, you need to think carefully about the agent you choose.
Here are three important factors to consider when deciding on an agent.
1. Whether the agent is registered with the relevant governing body
A reliable agent should be registered with the relevant organisation before they can sign players and negotiate contracts. This ensures that they are operating within the rules and acting ethically towards the players and clubs they work with.
While you may assume that all agents will have the correct registrations, this may not be the case. It is important that you check the accreditation of a potential agent by asking for their registration number.
The RFU, WRU, SRU, and IRFU all keep lists of registered agents on their websites. You can check these directories before signing with an agent to ensure they are legitimate. If you are playing abroad, you may need to find an agent who is accredited to work overseas.
2. Their fee structure and issues with dual representation
The right agent could help you increase your earnings by negotiating higher salaries and finding you additional work off the pitch. However, the fees charged by the agent will determine how much you personally take home.
As such, it is important to be clear about their fee structure before agreeing to work with an agent. You will also need to discuss how and when they take their share of any earnings. Knowing what you will pay and when allows you to plan your income more effectively.
That said, the circumstances could be more complex if there is an issue with dual representation.
This describes a situation where an agent represents both parties in a transaction. For instance, an agent who is already advising you might be hired by your club to facilitate negotiations about your new contract. Alternatively, an agent might represent you and your new club during a transfer, so the process runs smoothly.
Typically, governing bodies only allow dual representation if both parties agree to it in advance and any conflicts of interest are recorded in writing. Even with these regulations in place, dual representation may still cause confusion about your tax position.
The club will likely pay some or all the fees while you pay the rest. It is important that the split reflects the services received by you and the club.
If a club pays a portion of the fees for services that are considered to be for your benefit, you could be liable for Income Tax and National Insurance contributions (NICs) on this amount.
The general stance of HMRC is that the player benefits more than the club, so splitting the fees equally could result in an unexpected tax charge. It is important that you have a clear breakdown of all the services and can justify the division of the fees.
You may want to check whether there are likely to be instances of dual representation with an agent before signing with them, so you are clear about your position. Seeking guidance from a financial planner and tax adviser could also help you navigate the complex rules around dual representation and avoid costly mistakes.
3. The scope of their services beyond your playing career
As a professional rugby player, you could earn additional income from brand and sponsorship deals or media appearances. The right agent could help you find supplementary work and negotiate favourable rates of payment.
This extra income could make it easier to save and invest for the future. More importantly, establishing work in these areas now means you have more options when your playing career ends. As such, you might have a smoother transition to your second career.
A good agent may support you with this transition by helping you find opportunities for coaching work or punditry after you hang up your boots.
It may be useful to discuss what additional services an agent offers, as some will be more involved than others when it comes to supporting your career off the pitch. You might also want to ask how they work with other important members of your team, including your financial planner or accountant.
When your agent acts as part of a cohesive team with financial professionals, you can understand the tax implications of any work off the pitch. You can also ensure that additional income is managed in a way that supports your long-term financial aims.
Get in touch
If you need help managing wealth earned on or off the pitch, we can support you.
Email enquiries@dbl-am.com or call 01625 529 499 to speak to us today.
Please note
This article is for general information only and does not constitute financial or legal advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
The Financial Conduct Authority does not regulate tax planning.