Britain’s sporting calendar is in danger of being decimated by a new threat: a harsh tax regime blowing in from the government.

 

Some of the world’s top sports stars are turning their backs on tournaments in Britain because of “draconian” taxes now being imposed on their worldwide sponsorship deals.

 

Big events could lose some of their main attractions because of a new offensive by HM Revenue & Customs (HMRC) to impose levies on money from endorsements. It confirmed this weekend that it is also targeting sponsors’ performance-related bonuses.

 

For example, if a sports star plays in two tournaments or races in two marathons a year, and one of those events is in Britain, they could be charged 50% tax on half their total annual sponsorship money.

 

Sergio Garcia, the Spanish golfer, played five tournaments in Britain in 2001, but plans to play just one here this year. He says that as he is paying more tax than he can earn from winnings, he has to think twice about playing in Britain.

 

Julian Hedley of RSM Tenon Media, who represents many top sportsmen, said another leading golfer had paid nearly six times more to HMRC in tax than he earned for participating in two UK tournaments last year — effectively paying a tax rate of 570%.

 

The taxman is now setting his sights on tennis players such as Roger Federer and Maria Sharapova. When they play at Wimbledon for two weeks this summer, they could be hit by a 50% tax on a proportion of their annual sponsorship deals.

 

The threat is such that Fifa, football’s ruling body, has already asked for an exemption for the 2018 World Cup if it is held in England.

 

Although teams are generally exempt from the new tax grab on sponsorship money, Wembley was ruled out of holding this year’s Champions League final after failing to provide assurances that players taking part would not be taxed on their salaries.

 

“Yes, the reason was the taxes,” said Michel Platini, the Uefa president. Instead the final went to Real Madrid’s Bernabeu stadium.

 

The size of endorsement taxes can far exceed the appearance fees and winnings that stars earn while competing here. Tax experts said the rules could even land the American golfers playing in the Ryder Cup in Wales this October with hundreds of thousands of pounds in endorsement taxes — even though they will not receive an appearance fee.

 

Jonathan Orr, the finance director at the European Tour, which organises the Ryder Cup and the British Open golf tournaments, said: “These tax rules are discouraging leading golfers, indeed all leading sportsmen and women from competing in Britain.

 

“Our aim is to attract the best players to provide the best entertainment for our audiences in the UK, and I strongly believe that this tax rule is seriously hampering these efforts.”

 

The tax rules can be particularly gruelling for marathon runners such as Paula Radcliffe, who typically race just twice a year. An athlete who competed at the London marathon in April and the Berlin marathon in September could have half their endorsement income taxed — even if they spent 50 weeks of the year training in Kenya or Ethiopia.

 

There are concerns that tennis players will in the future avoid traditional pre-Wimbledon tournaments at Eastbourne, Nottingham and the Queen’s Club, in favour of rival championships based in countries that do not tax endorsements of visiting sportsmen.

 

Ian Ritchie, chief executive of the All England Club, said: “We urge HMRC to stop this before it is too late. It could inflict huge damage on Britain’s ability both to continue to stage world-class sports events and attract new ones in the future.”

 

Nick Bitel, the chief executive of the London Marathon, said: “We now have a situation where a number of senior, well-known sportsmen are saying they will come here only for the biggest events, but not for any other UK events — that’s a real loss for British spectators and the economy.”

 

The taxman has begun to pursue a more aggressive line after a 2006 House of Lords ruling involving Andre Agassi, the American tennis player, said endorsement payments should be liable for tax.

 

Richard Baldwin, a tax consultant who advised the London bid for the 2012 Olympics, described HMRC’s approach to sponsorships as “draconian”.

 

“The Revenue has got greedy,” said Mike Warburton, senior partner at Grant Thornton, the accountant.

 

“In previous years the tax charge would be based on how many days of the year the sportsman was in the UK. So if they played in a two-week tournament, one 26th of their endorsement income would be liable for UK tax.

 

“Now, HMRC bases it on what proportion of your competition events are in the UK. So, if you only play five tournaments a year and one of them is here, one fifth of your endorsement earnings would be liable for tax.”

 

The HMRC said the tax was always levied on a “just and reasonable” basis.

 

HOW THEY WILL BE TAXED

 

Foreign sports stars competing in Britain have to complete a UK tax form declaring their appearance fees, winnings and global endorsement income.

 

HM Revenue & Customs imposes an income tax on appearance fees and winnings, plus any endorsement earnings viewed to be “connected to the UK performance”.

 

When determining how much endorsement tax was payable, it used to tax the proportion of a sports star’s playing and training days spent in Britain.

 

The taxman now argues that what counts is the proportion of a sportsman’s competition days that are here. So, if half a golfer’s tournaments are in Britain, half of his endorsement earnings become liable for British tax.

 

Source: Sunday Times

 

I am all for the rich paying their fair share of tax, but is this just pushing things a bit too far, if it prevents top sports stars competing in Britain.

Oh please! They're being absolute drama queens, it's only 10% difference...

 

...and as long as we have Wimbledon, Ryder Cup etc., we have nothing to worry about.

This is an absolute disaster for UK Sports, as the impact is already being felt within the Premiership.

This is an absolute disaster for UK Sports, as the impact is already being felt within the Premiership.

Foreign players at Premier League clubs should count as being based here for tax purposes. Some countries (Spain for example) exempt top sportsmen from higher tax rates which seems totally unjust to me. And let's face it, if some of the foreign players left, it might harm the clubs but it could be a good thing for the England team. After all, the Bundesliga attracts relatively few top foreign players (partly because they don't pay such high wages) but the German national team continue to do well.

Well, the only sport I follow closely is tennis, and I can assure you that absolutely no player will be skipping Wimbledon, extra taxes or no extra taxes.

 

 

There are concerns that tennis players will in the future avoid traditional pre-Wimbledon tournaments at Eastbourne, Nottingham and the Queen’s Club, in favour of rival championships based in countries that do not tax endorsements of visiting sportsmen.

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This isn't likely to happen either, because virtually all the grass-court warm-up tournaments are in Britain.

This is an absolute disaster for UK Sports, as the impact is already being felt within the Premiership.

 

Rubbish.... Tyron is right, it's over-pampered prima-donnas just whingeing for the sake of it.... <_< You tell me just why the fukk I should pay, as a proportion, more of my wages in tax than some fukkin' multi-millionaire sports or film star, it's nonsense....

 

Fukk that sh!t..... The rich in general have been getting away with paying their fair share for way too long, all starting with the Tories in the 1980s....

 

If it means less foreign football stars come here, so what?? It just means we have to bring up more of our own talent and for more clubs to actually have a better-defined Youth Policy, which is surely not a bad thing....

They should get their tax paid and stop whingeing. If they earn a lot then they shouldn't begrudge paying the extra tax.

They should get their tax paid and stop whingeing. If they earn a lot then they shouldn't begrudge paying the extra tax.

Weren't you against the increase in the tax rate in last year's Budget? :unsure:

Weren't you against the increase in the tax rate in last year's Budget? :unsure:

 

 

I have no idea. Can't remember.

Weren't you against the increase in the tax rate in last year's Budget? :unsure:

 

I was. But I was against it in certain situations. I was against a surgeon being taxed 50% because they save lives (income from consults is a different story altogether). I support high taxes for bankers and footballers because they are hideously overpaid. I was also against people being on job-seeker's allowence but having cash-in-hand jobs (it happens everywhere). My point was: instead of taxing surgeons, tax bankers/footballers and clamp down on allowance "fraud". Although, looking back on the disagreement you and I had, I wasn't very good at getting my view across at all. :smoke:

Edited January 18, 201015 yr by Cal

Rubbish.... Tyron is right, it's over-pampered prima-donnas just whingeing for the sake of it.... <_< You tell me just why the fukk I should pay, as a proportion, more of my wages in tax than some fukkin' multi-millionaire sports or film star, it's nonsense....

 

Fukk that sh!t..... The rich in general have been getting away with paying their fair share for way too long, all starting with the Tories in the 1980s....

 

If it means less foreign football stars come here, so what?? It just means we have to bring up more of our own talent and for more clubs to actually have a better-defined Youth Policy, which is surely not a bad thing....

 

you talk as if all sports stars are wealthy... get this ... THEY ARNT!

 

athletics sports stars in particular have very little funding dispite their 24/7 dedication. many hold down jobs because they cant get enough funding... yet are still supposed to perform for the glory of the country.

you talk as if all sports stars are wealthy... get this ... THEY ARNT!

 

athletics sports stars in particular have very little funding dispite their 24/7 dedication. many hold down jobs because they cant get enough funding... yet are still supposed to perform for the glory of the country.

 

I actually used footballers as my main example, Rob in case you didn't notice..... I know full well that track and fields stars dont exactly earn much, so, how's the Top Rate gonna affect them if they aint got the bread to pay it...? Numpty..... :rolleyes:

I actually used footballers as my main example, Rob in case you didn't notice..... I know full well that track and fields stars dont exactly earn much, so, how's the Top Rate gonna affect them if they aint got the bread to pay it...? Numpty..... :rolleyes:

 

erm, these laws would affect every sports person so limiting your comment to footy players aint adrressing the issue.

 

it says 50% tax rate on all sponsorships.... no referance to net income, so 50% on a sponsorship of £10 would be levied.

erm, these laws would affect every sports person so limiting your comment to footy players aint adrressing the issue.

 

it says 50% tax rate on all sponsorships.... no referance to net income, so 50% on a sponsorship of £10 would be levied.

I think they're making an assumption that a sponsorship deal will be worth more than £100,000? :P

I think they're making an assumption that a sponsorship deal will be worth more than £100,000? :P

 

That's what I would've thought.....

I don't think the majority understand the full financial implications of this. We are not talking about the rate of income tax increasing from 40% to 50%. This is a new 50% tax on a proportion of a sportperson's sponsorship money, regardless as to where it is paid, and regardless to their nationality.

 

For Example if Federer the tennis player has 10 million pounds in annual sponsorship, and he plays in 10 tornaments in 2010, of which 2 are in the UK, then he will be liable for 2/10 of £10m at 50%, that is £1m in tax. This is over and above any tax he pays on his appearance money and winnings.

 

If he only paid in the 4 grand slams he would pay 1/4 x £10m @ 50% tax which would be £1.25m.

 

This would no doubt restrict these sportmen appearances in the UK. They would only play in the main tournament and no others. The knock on affect would be no major stars coming to the UK, and all major tournaments would be made up of second rate people, that the public may not want to see. Therefore attendances would slump, and eventually may be cancelled.

 

This is nothing to do with premiership footballers who live here and already pay tax, it is purely a tax grab on anyone who has a sponsorship deal to collect tax to try and pay for more of Gordon Brown's little spending ideas. He still wants to spend, but the biscuit tin is empty, so he needs a new source of income to tax.

 

What happens if England win the bid for the 2018 world cup, and all the major players threaten to boycott it for tax reasons.I know that sounds an extreme case but that could become a possibility.

Edited January 21, 201015 yr by brian91

thats unacceptable...

I don't think the majority understand the full financial implications of this. We are not talking about the rate of income tax increasing from 40% to 50%. This is a new 50% tax on a proportion of a sportperson's sponsorship money, regardless as to where it is paid, and regardless to their nationality.

 

For Example if Federer the tennis player has 10 million pounds in annual sponsorship, and he plays in 10 tornaments in 2010, of which 2 are in the UK, then he will be liable for 2/10 of £10m at 50%, that is £1m in tax. This is over and above any tax he pays on his appearance money and winnings.

 

If he only paid in the 4 grand slams he would pay 1/4 x £10m @ 50% tax which would be £1.25m.

 

This would no doubt restrict these sportmen appearances in the UK. They would only play in the main tournament and no others. The knock on affect would be no major stars coming to the UK, and all major tournaments would be made up of second rate people, that the public may not want to see. Therefore attendances would slump, and eventually may be cancelled.

 

This is nothing to do with premiership footballers who live here and already pay tax, it is purely a tax grab on anyone who has a sponsorship deal to collect tax to try and pay for more of Gordon Brown's little spending ideas. He still wants to spend, but the biscuit tin is empty, so he needs a new source of income to tax.

 

What happens if England win the bid for the 2018 world cup, and all the major players threaten to boycott it for tax reasons.I know that sounds an extreme case but that could become a possibility.

 

Hmm, well in that case, I probably will revisit my opinion... It is rather out of order tbh.... Especially when one considers that the likes of Rupert Murdoch and others continue to get away with paying a fukkin' PENNY in taxes even though they have operations in the UK and live as Tax Exiles.... The Govt seem unwilling or incapable to target these Fat Cats, so it does seem that they're getting rather overly punitive with those they can grab....

The main issue with this new 50% is the govt estimeated £600m income, but if people just leave or in this example just don't come the country will simply end up losing more money. A number of comapnies have expressed interest in moving their headquarters abroad, yes I agree this is pretty disgusting, but companies/people going abroad will cost the country alot more in the long run.

They should stop bloody moaning they are already overpaid as it is.