Bolt Running Scared Of UK Taxman

by Amanda Banks, Tax-News.com, London

15 July 2010

World and Olympic sprint champion Usain Bolt may pull out of a major sprint meeting in London next month because of Britain’s severe tax rules for foreign sportsmen and women.

Jamaican Bolt was expected to line up against fellow stars Tyson Gay and Asafa Powell at the Crystal Palace event but faces a situation whereby he may pay more in UK tax than he actually earns from appearing in the event.

This situation stems from a House of Lords ruling against tennis star Andre Agassi in 2006, which allows HM Revenue and Customs to impose tax on a portion of foreign endorsement earnings relating to performance of the endorsement contract in the UK.

Other sporting stars have already curtailed their appearances in the UK for the same reason, among them Spanish golf star Sergio Garcia, who now restricts his UK appearances to once per year in the British Open.

There was some concern in sporting circles that the tax burden would mean that some of the world’s top stars may decide not to appear at the 2012 Olympic Games in London. HMRC has granted an exemption for this event and for next year’s Champions League Final to be held at Wembley, but refuses to grant individual exemptions.

Writing in the Daily Telegraph, Mike Warburton, Tax Director at Grant Thornton, called the rule "stupid" and "damaging" to Britain's sporting reputation and its economy.

"The problem is that the taxman became greedy and started claiming far more than his share of the overseas sponsorship which is why the test case arose," Warburton wrote. It's time that the government realised the damage this is causing, not just to our great sporting events, but also to our economy if it puts off key players from taking part and downgrading the quality of the event."

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