UK defers proposed employment-tax treatment of image rights to April 2028

The proposal would treat payments for image rights connected with an employment as employment income, taxed in the same way as wages. It covers payments made directly to an employee or through a third party. HMRC says the measure mainly affects professional sport, including a minority of employers in professional football; it is not a general change to the taxation of every intellectual-property licence.^[1]

The policy paper says the change was announced at Budget 2025 and had been intended to apply from 6 April 2027. The government now intends 6 April 2028, giving employers and employees another year to adjust. Primary legislation remains to be introduced, including a power to address deemed employment relationships. Regulations would also bring relevant payments within employee and employer Class 1 National Insurance contributions.^[1]

Current employment-income rules are in Part 3 of the Income Tax (Earnings and Pensions) Act 2003; section 62 defines earnings to include salary, wages, fees and other employment emoluments. The policy paper identifies uncertainty over arrangements connected with employment. It expressly says an entirely separate arrangement with a third party would be unaffected, so the link to employment remains a material boundary.^[1][2]

Affected employers should use the additional lead time to assess contracts and payroll consequences, without assuming that the deferral creates a present exemption. HMRC anticipates PAYE operation and employer National Insurance on relevant payments under the proposed change, but says it introduces no additional tax administrative processes. This brief concerns the image-rights proposal only, not completion of the wider Budget 2026 business-tax package.^[1]