Liam Rosenior could reportedly pocket a £24million pay-off following the early termination of his Chelsea contract. However, the English head coach would also face a hefty tax bill in the process.
Despite being appointed as recently as January, Rosenior’s position at Stamford Bridge became untenable after a dismal run of five consecutive defeats without finding the net. The club relieved him of his duties after just 106 days at the helm on Wednesday evening. A crushing 3-0 defeat to Brighton on Tuesday, during which his side failed to register a single shot on target, proved the final straw for the Blues board. The manager’s contract had been due to run until 2032.
Rosenior was reportedly earning £4m per year in west London, with further speculation suggesting a total settlement of £24m is heading his way.
Assuming these reports prove accurate and no clauses in his deal prevent it from being paid in full, a considerable portion of whatever Rosenior receives would find its way to HMRC.
The Sun reports that Rosenior is set to receive the full £24m following his dismissal, despite separate speculation pointing to a break clause in his contract that could significantly reduce the size of his pay-out. Assuming the manager is a UK resident and receives the £24m, it would be liable to the highest UK income tax rate.
Given that this figure surpasses £125,140, Rosenior would face a tax rate of 45 per cent, meaning a staggering £10.7m would theoretically be owed to HMRC.
On top of this, a further two per cent in national insurance would generally be applicable, bringing the total to approximately £11m. A £30,000 tax-free allowance can be deducted from the original £24m beforehand, in accordance with redundancy regulations.
So taking everything into account, should Rosenior receive the maximum payout from his prematurely curtailed long-term Chelsea contract, the sum would generate a UK tax liability of around £11m.
The 41-year-old is the latest in a long line of Chelsea managers to have their tenure cut short. Graham Potter, Enzo Maresca and Mauricio Pochettino have all walked away with substantial financial settlements in recent years.
