Rugby stars miss out on Bolt tax break

Top foreign rugby players will not receive a “Usain Bolt tax break” during the 2015 World Cup despite the government announcing that non-resident athletes would be exempt from income tax at other major sporting events.

Rugby players competing in the UK-hosted competition, which is projected to bring in more than £2.1bn into the economy, will face a 50% tax on appearance fees and prize money.

HMRC also taxes athletes on a proportion of their global endorsement income, which is calculated by dividing the number of days a foreign athlete spends training and competing in the UK by the total number of days the athlete trains and competes around the world.

According to The Telegraph, the International Rugby Board (IRB), which is expected to net £300m from the event, did not put forward a request to the Department of Culture, Media and Sport to exempt foreign players.

The news comes just days after the Chancellor confirmed in his Budget speech that...

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Comments

A bit like Topsy - it growed...    1 thanks

Paulsoper | | Permalink

These rules were designed to ensure that when payments were made by organisers to non-resident sports persons that an appropriate deduction to allow for UK tax was made at source.  It extended to payments made to overseas companies etc to ensure that appropriate tax wasn't avoided. To do this it was necessary to ensure that as well as a liability to deduct tax on the payer there was a liability to offset the tax against on the payee.

Then came the Agassi decision and the legislation was now being interpreted to bring into liability in the UK sums such as racquet sponsors and kit sponsors which never originated in the UK but were caught by the wording of the legislation designed to prevent avoidance by persons in the UK routing sums to overseas entities.  These sums were not routed to overseas entities but were caught because of fear that they would be.

Now an athlete like Usain Bolt, or these Rugby players find themselves caught in respect of sums which were surely never intended to be taxed in the UK in the first place as they had no UK source and so a single appearance in the UK can generate a liability which exceeds, enormously, the income that will be generated from the UK appearance - and so we now need to construct these exemptions for the Olympics, the Commonwealth games etc - STOP!!!

What we need to do is go back to the basics where this provision originated and alter it so that it works as it was originally intended, then a Rugby player can participate in sport in the UK and be taxable only on the amount which relates to that appearance, rather than find, as at present, that deciding to come to the UK makes them poorer than if they never came here in the first place.  And we, in the UK, are poorer for their not coming to the UK as well.

All we need is a targeted anti-avoidance rule to prevent UK sums being routed into offshore entities, job done, no ludicrous liabilities, everyone is happy and, probably, more tax collected in the long run.

mydoghasfleas's picture

Amateurism

mydoghasfleas | | Permalink

The IRB is part to blame here.  As it is less than 20 years since Rugby Union became "professional" the International Rugby Board is probably run by individuals from that earlier time.  Will Carling's 57 Old Farts reference was made in the run up to the 1995 World Cup when the game was still amateur.  I know it is a different bunch but you have to think the odour is familiar.