Liam Rosenior could reportedly earn £24m after his contract with Chelsea ends early. However, the English head coach will also face a hefty tax bill in the process.
Despite only being appointed in January, Rosenior’s position at Stamford Bridge became untenable after a disastrous run of five consecutive defeats in which he failed to find the back of the net. The club relieved him of his duties on Wednesday night, just 106 days into his role. Tuesday’s 3-0 defeat at Brighton, in which the team failed to register a single shot on target, was the final straw for the Blues board. The manager’s contract runs until 2032.
Mr Rosenior is reported to be earning an annual salary of £4 million from west London, and there is speculation that a further £24 million in settlements may be on his way.
Assuming these reports prove accurate and there are no clauses in the contract preventing full payment, a significant portion of what Mr Rosenior received will go to HMRC.
The Sun reports that Rossenyol is set to receive his full £24m payout following his sacking, despite separate speculation that his contract contained a penalty and his pay could be significantly reduced. Assuming the manager is UK resident and receives £24m, the highest UK income tax rate will apply.
Given that this figure exceeds £125,140, Rosenior would face a 45 per cent tax rate, meaning he would theoretically end up paying a staggering £10.7m to HMRC.
On top of this, a further 2% national insurance is generally applied, bringing the total to around £11m. In line with redundancy provisions, a tax-free allowance of £30,000 will be pre-deducted from the initial £24m.
So, all things considered, if Rosenior were to receive the maximum payout from his prematurely truncated long-term contract with Chelsea, that total would be a tax liability in the UK of around £11 million.
The 41-year-old is the latest in a long line of Chelsea managers to have their terms cut short. Graham Potter, Enzo Maresca and Mauricio Pochettino have all left after making big financial settlements in recent years.
