Tax, rising...alarming rate

Well I am managing Stoke and just into thrid season. I have noticed for some reason now that the highest thing we spend money on each month is tax. It seems when I look at the graph it is going up and up, this a long with match day expenses. Is this normal, and if so why is my tax bill rising so much?

what about your turnover, has that increased since you took charge?

If so then that will be the reason

Well our turnover has remained about the same, in fact the months the tax bill was higher we were making less due to having a reduced stadium capacity at the time. We make between -1mil and +1 mil a month,except end of season months and tranfer months.

Have you signed better players on higher wages? If so they PAYE tax will be more so the club will pay more tax in total.

Nope, infact I have got a smaller squad now, saving about 60k on wages than last season. plus don't those taxes come out of the players wage, not the clubs money.

Seems to be an issue several people are having:-

http://community.sigames.com/showthread.php/329255-Why-am-I-losing-money

But SI aren't recognising it as a bug - http://community.sigames.com/showthread.php/327458-club-tax-is-insane!!!-my-juventus-loses-2-3-millions-pounds-each-month

There is no reason tax should be rising dramatically without massive increases in profit and wages.

Nope, infact I have got a smaller squad now, saving about 60k on wages than last season. plus don't those taxes come out of the players wage, not the clubs money.

The club will pay NI on the players wages. But the actual PAYE is deducted from the employees salary, so this shouldn't show as a club tax bill.

Any profits will be subject to corporation tax, but if you're making a loss, then this is not paid.

Clubs are subject to capital gains tax on the sale of shares in the club. Unless you're one of the many that have set up overseas to avoid this, like Reading and Man United.

Any players sold for a profit will likely be subject to a capital gains tax (I would have thought, but someone could confirm this) as essentially you're selling an asset. So if you've sold players on, you could have incurred a tax charge on this.

All match day income etc is subject to VAT. Selling those pies incurs a tax charge.

There are plenty of area's where a club would be taxed.

All match day income etc is subject to VAT. Selling those pies incurs a tax charge.

Tere it is then, my success is also going to cost me more, despite me saving money, as more people want those pies, damn you people of Stoke(in game people that is)

Yeah but is the tax being calculated correctly? My second season with my qualifying for the Euro cup actually made me worse off than the previous season when i had no Europe, my wage bill only went up by £3k a week, but my tax more than doubled. I understand higher attendances and transer sales, and prize money will be adding to this, but it seems your losing out by doing better.

Well I tihnk tax might not be too far off, but it jut needs explaining a little bit more. Clearly it makes sense that as you earn more money you will have to pay more tax, and the way tax is worked out in real life sometimes means you pay more tax than required, but then in real life there is a rebate, I wonder if we will ever see them in FM.

The club will pay NI on the players wages. But the actual PAYE is deducted from the employees salary, so this shouldn't show as a club tax bill.

Any profits will be subject to corporation tax, but if you're making a loss, then this is not paid.

Clubs are subject to capital gains tax on the sale of shares in the club. Unless you're one of the many that have set up overseas to avoid this, like Reading and Man United.

Any players sold for a profit will likely be subject to a capital gains tax (I would have thought, but someone could confirm this) as essentially you're selling an asset. So if you've sold players on, you could have incurred a tax charge on this.

All match day income etc is subject to VAT. Selling those pies incurs a tax charge.

There are plenty of area's where a club would be taxed.

Think it does, clubs pay the players wages and then need to send the PAYE amount to the HRMC, they do this monthy or quarterly. It's why Portmsouth racked up such a huge tax bill because they were deducting the money from the player's wages but not passing it on. I think FM lumps all tax together as well.

Think it does, clubs pay the players wages and then need to send the PAYE amount to the HRMC, they do this monthy or quarterly. It's why Portmsouth racked up such a huge tax bill because they were deducting the money from the player's wages but not passing it on. I think FM lumps all tax together as well.

I agree but if you look at the expendature, for the wage bill, I pay x wages and y tax. My wages add up to the total salary for players. If this were the case it would be half that, as the other half should be in my tax expenditure, unless this is the bug, it's shows 100% wage as an expenditure, then showing the 50% of that wage again in the tax, effectively charging you twice?

I agree but if you look at the expendature, for the wage bill, I pay x wages and y tax. My wages add up to the total salary for players. If this were the case it would be half that, as the other half should be in my tax expenditure, unless this is the bug, it's shows 100% wage as an expenditure, then showing the 50% of that wage again in the tax, effectively charging you twice?

Maybe this is the bug.

Does your wages total and the tax expenditure work out in the total expenditure?

The game might show you your total wage bill but then show wage bill + taxes in the overall fiances.

So far this season I have the following.

£11,396,289 in wages going out

£7,740,232 in tax going out

The tax rate in Italy for HRT is 43% which equates to £4,900,404

Since my income is so far £44m and expenditure is £36m. Since corporation tax is around 30% of profit, so £9m @ 30% is £2.4m which brings a total tax to £7.3m (as above). This is all rough calculations done part season. But it could be that we're paying 100% of wages to players, and then paying the 43% of tax too, giving the players tax free money.

Hopefully SI could explain how they've build taxes into the game to calculate so we can confirm this?

Tax is apparently on the previous seasons income though.

Tax is apparently on the previous seasons income though.

Well I don't have that to hand, but I'm Parma, who I know made a huge loss last year so I wouldn't have had to pay too much tax. Current tax on wages diesn't stack up though.

SI really need to break down for us how they are calculating tax as a lot of people are getting confused about it.

Newcastle, feb 2019. I went from £24,7m to £132,5m in tax per season, and is closing in on a nice bankruptcy. Even though my sell/buy is; £374m - £207m.

If this is based on previous seasons income, then selling stars and bring up young talents isn't the way to go. Can't be like this irl?

Is this tax thing a bug?

I'm leaning towards this being a bug. Would be nice for SI to tell us how Tax is calculated in game so we can check that our saves are correct.

Really this game needs a massive manual.

All match day income etc is subject to VAT. Selling those pies incurs a tax charge.QUOTE]

Yes, but when the club purchase something (whereas reclaimable VAT has been charged) the reclaimable VAT also increases which decrease the payable VAT. In fact if the volume of the purchased items higher than sold the club should have tax receivable... I highly dubt if it is included in the game. sorry from my scrappy english

I am playing in England. Last season's income was 122M. This season in april my expenditure is 138M, including 44M of tax (last season I paid 7M in tax). I am having 20M transfer budget and 500K wage budget left. I would have been bankrupt had I used all of that.

EDIT: szasinka raises a very good point.

I've seen so many threads about this. It definitely doesn't add up yet SI are staying mysteriously quiet?

Well I don't have that to hand, but I'm Parma, who I know made a huge loss last year so I wouldn't have had to pay too much tax. Current tax on wages diesn't stack up though.

SI really need to break down for us how they are calculating tax as a lot of people are getting confused about it.

I'm Parma too, first season I paid £7m on tax. Into the second season right now so not sure if it will go up or what but my wage bill was already cut dramatically despite making a profit.

reminds me of the fun times when taxes were introduced to FML and the joys trying to figure out what was going on.

I think Szasinka might have found the problem. It seems like the game only add tax for your income and doesn't reduce it for expenditure. Thoughts?

There's only so much you can speculate without knowing what is being taxed.

Last season with Everton i paid £53m in Tax, rising sharply after we qualified for the Champions League.

TV Revenue: £98m

Prize Money: £42m

These 2 areas of Income have risen sharply in my last few seasons as we qualified for the Champions League. The UEFA Rules & Regulations rulebook says their payments cover all taxes, levies and charges, so i'm interested to see if these are being taxed in-game.

I've seen so many threads about this. It definitely doesn't add up yet SI are staying mysteriously quiet?

Except that Stu Coleman in the bugs forum has said there is a bug in Italy and they are looking into other leagues. So not quiet, and trying to fix it. If anyone has a clear example of the bug, post it in the right thread on the bugs forum as more examples for SI can't hurt

Hmmm... Comparisons of taxes over the course of the season for several premier league clubs chosen at random who were not relegated or newly promoted towards of the end of the first season (note, there is still roughly a month of the season to go):

Chelsea: £28 mil => £37 mil (132%)

Everton: £9 mil => £16 mil (178%)

Everton: £9 mil => £18 mil (200%)

Arsenal: £29 mil => £43 mil (148%)

Man U: £26 mil => £67 mil (258%)

Liverpool: £20 mil => £62 mil (300%)

Stoke: £8 mil => £20 mil (250%)

Hmmm...

It's possible that some clubs are just better at avoiding tax- eg loopholes Either that or there is some randomnous to it.

Yeah something must be up here, why would tax go up that much for no real apparent reason?

To clarify the previous post:

Club Name: Season one taxes => Taxes to mid May in the second seasons (this figure as a percentage of first season taxes)

Long story short, they seem to jump in the second season.

SI really need to give a breakdown. I don't know how many more times we have to ask for this. They're saying it's not a bug without providing evidence. There have been countless threads on massive losses due to tax. It needs a definitive answer.

I believe they've said in the bugs forum the tax in the Italian league is wrong and they are looking into other leagues. If they are wrong also this needs a fast fix.

If there is a fix, it needs to be save game compatible. Otherwise those of us who have invested dozens of hours into this game have completely wasted our time.

If there is a fix, it needs to be save game compatible. Otherwise those of us who have invested dozens of hours into this game have completely wasted our time.

To be honest, I don't really see how it could be fixed if there is a real issue. They could fix it such that the issue itself goes, but if it's done untold damage to clubs over the years that can hardly be undone.

Lets just Hope someone from SI announces a definitive yes or no soon regarding if there is a problem or not.

I'm 3 years in and no clubs seem to be in any real financial trouble and it hasnt stopped anyone buying players, maybe it doesnt affect the AI teams the same? I would say if they can fix it there would be no real issues long term, teams could recover after a few seasons.

I think Szasinka might have found the problem. It seems like the game only add tax for your income and doesn't reduce it for expenditure. Thoughts?

I'm no accountant but it occurs to me that not all expenditures are necessarily tax-deductible. It isn't as simple as subtracting expenditure from income and then paying tax on the difference as far as I know. I believe you generally calculate tax on income and then subtract deductibles from that, with some assets and liabilities being calculated in vastly different ways. For example, some assets depreciate meaning you generate liability without expenditure in a sense, whilst some expenditures are simply not tax deductible. And all this varies by country.

Also want to reiterate that if anyone comes up with examples to post them in the bugs forum ASAP, particularly for non-UK leagues. I believe the UK finances are being looked at specifically so additional league info might be more beneficial at this point.

I think in germany too there is something suspicious. i just checked my finances and i am now in 25th february and paid 13.2 mil tax already. last season i paid 13.5 mil for the season.

this year i've reduced the wage bill to 4.5mil/month as opposed to 5.3/mil last season..i am no economist but something is wrong here..

What I think happens is that team gets charged tax due to it naturally coming out of players wages but also they get charged tax on salaries on top of that. Effectively you are getting charged twice for the same thing.

I think SI knows that tax is messed up but won't admit it due to it being impossible to fix before 14.

Lets not jump to conclusions just yet, it could be a simple error to fix, or it could be a database issue, or it could be worse, lets let SI have a look and see what they come up with.

What I think happens is that team gets charged tax due to it naturally coming out of players wages but also they get charged tax on salaries on top of that. Effectively you are getting charged twice for the same thing.

I think SI knows that tax is messed up but won't admit it due to it being impossible to fix before 14.

even if that's the case,tax should be around the same every season if you don't increase in salariers. i've lower the salaries but somehow paying more tax??

The question I have is what is the calculation made for corporation tax in the first year - where is it set? Is it being paid at all?

There is no line in the editor - that also would tie up with the taxes increasing in the 2nd season when there are profits from the 1st season.

ajw10 - I don't think it is the income tax being double counted, I ran a test on Man City and the taxes were about £7 million a month lower than if that was the case, although I couldn't cobble any figures together to work out how the tax is calculated.

Playing as Rangers in season 3 and my tax is out of control. 2 previous loss making seasons, downsizing wage bill and no players sold for cash and its doubling ever year.

The club will pay NI on the players wages. But the actual PAYE is deducted from the employees salary, so this shouldn't show as a club tax bill.

Any profits will be subject to corporation tax, but if you're making a loss, then this is not paid.

Clubs are subject to capital gains tax on the sale of shares in the club. Unless you're one of the many that have set up overseas to avoid this, like Reading and Man United.

Any players sold for a profit will likely be subject to a capital gains tax (I would have thought, but someone could confirm this) as essentially you're selling an asset. So if you've sold players on, you could have incurred a tax charge on this.

All match day income etc is subject to VAT. Selling those pies incurs a tax charge.

There are plenty of area's where a club would be taxed.

Capital Gains Tax is only charged on individuals so doesn't apply. VAT on transfers could be relevant though. If you signed a number of players who's fees are being paid in installments then there's 20% VAT to pay on each payment (In UK at least. VAT rates vary across Europe).

Ok,just checked manutd transfers,3rd season..they spent like 220mil euro until now on players..

They sold like around 50mil..so 170mil just on players and their finances are "okay",late april 3rd season.

Shouldn't they be deep in the red if they pay tax as much as people here?

Tax last three seasons;

2016/2017 - £24m

2017/2018 - £132,5m

2018/2019 - £189,5m

Exactly the same squad the last two seasons, except some minor player releases. Nothing bought. A couple of first teamers got a new contract.

It's almost like i'm paying tax for every player i've ever had in my squad(and their new contract-bumps with other clubs).

If you buy a player for, say £20m - Will you be hit with a £20m expense under "Players Bought" AND a £4m (20%) bill as Tax? Or will the £20m be VAT Inclusive?

Tax last three seasons;

2016/2017 - £24m

2017/2018 - £132,5m

2018/2019 - £189,5m

Exactly the same squad the last two seasons, except some minor player releases. Nothing bought. A couple of first teamers got a new contract.

It's almost like i'm paying tax for every player i've ever had in my squad(and their new contract-bumps with other clubs).

Oh wow, that is pretty striking. Please upload a save game and log that in the bugs forum.

If you buy a player for, say £20m - Will you be hit with a £20m expense under "Players Bought" AND a £4m (20%) bill as Tax? Or will the £20m be VAT Inclusive?

You don't charge VAT on people....