As a fan of both sport and tax, I was interested to hear of Usain Bolt’s decision not to compete in the Aviva London Grand Prix. We understand it’s not because he’s scared to face his big rivals, Tyson Gay and Asafa Powell, but wants to avoid the tax burden following the ruling in [André] Agassi v Robinson in 2006.
Agassi decided that sportsmen competing in the UK are liable for a 50% tax rate on appearance fee and a proportion of total worldwide earnings. As Bolt earns a fortune from product endorsements, this means that if he only raced five times this year, HMRC could tax 20% of his total earnings. His appearance fee alone for next month’s Grand Prix is reported to be £166,000 – so we’re talking big money!
The media are currently reporting that Bolt’s decision could affect London 2012, September’s Ryder Cup and England’s bid to host the 2018 FIFA World Cup. Let’s not panic! The government tends to exempt participants in major sporting events, Agassi was decided in 2006 and there has been plenty of world-class sports action in the UK since then.
However, exemptions are often inconsistent and depend on arbitrary judgement of what constitutes a major event. Many big names were missing from the pre-Wimbledon warm-up at Queen’s Club in June and, whilst Tiger teed off at St Andrews today, major names have been conspicuous by their absence at other big events in the UK’s golfing calendar.
As we were once led to believe that the Teenies were to be the decade of sport, the time has come for some clarification. We’ve an Olympics and a Rugby World Cup in the diary already and we’re bidding for the FIFA World Cup in 2018. As UEFA have expressed previous concerns and in the context of the rollercoaster ride that has been our 2018 bid, the whole thing could benefit from clarification from HMRC.
It seems unfair to tax sportspeople who have a unique double identity as sports hero and international brand. Companies compartmentalise worldwide operations by dividing themselves into various legal entities leaving only transfer pricing as an issue.
As a fan of both sport and tax, I was interested to hear of Usain Bolt’s decision not to compete in the Aviva London Grand Prix. http://news.bbc.co.uk/sport1/hi/athletics/8812123.stm
We understand it’s not because he’s scared to face his big rivals, Tyson Gay and Asafa Powell, but wants to avoid the tax burden following the ruling in [André] Agassi v Robinson in 2006. http://www.publications.parliament.uk/pa/ld200506/ldjudgmt/jd060517/agasro-1.htm
Agassi decided that sportsmen competing in the UK are liable for a 50% tax rate on appearance fee and a proportion of total worldwide earnings. As Bolt earns a fortune from product endorsements, this means that if he only raced five times this year, HMRC could tax 20% of his total earnings. His appearance fee alone for next month’s Grand Prix is reported to be £166,000, so we’re talking big money.
The media are currently reporting that Bolt’s decision could affect London 2012, September’s Ryder Cup and England’s bid to host the 2018 FIFA World Cup. http://www.telegraph.co.uk/sport/golf/rydercup/7888472/Usain-Bolts-tax-dash-from-UK-causes-alarm-for-Ryder-Cup-organisers.htmlm
Let’s not panic! The government tends to exempt participants in major sporting events, Agassi was decided in 2006 and there has been plenty of world-class sports action in the UK since then.
However, exemptions are often inconsistent and depend on arbitrary judgement of what constitutes a major event. Many big names were missing from the pre-Wimbledon warm-up at Queen’s Club in June and, whilst Tiger teed off at St Andrews today, major names have been conspicuous by their absence at other big events in the UK’s golfing calendar.
As we were once led to believe that the Teenies were to be the decade of sport, the time has come for some clarification. We’ve an Olympics and a Rugby World Cup in the diary already and we’re bidding for the FIFA world Cup in 2018. As UEFA have expressed previous concerns and in the context of the rollercoaster ride that has been our 2018 bid, the whole thing could benefit from clarification from HMRC.
It seems unfair to tax sportspeople who have a unique double identity as sports hero and international brand. Companies compartmentalise worldwide operations by dividing themselves into various legal entities leaving only transfer pricing as an issue. Usain Bolt, Tiger Woods and their contemporaries cannot do this and ultimately: as always, sports fans lose-out.
2018 FIFA World Cup, Andre Agassi, Asafa Powell, Aviva london Grand prix, Ryder Cup, Tax, Tyson Gay, Usain Bolt
Victoria Walmsley Operations Director
