Tennis associations lobby for relief from UK taxes
28 November 2011
The UK tax authorities made GB68 million from
taxing international sports and entertainment professionals'
endorsement and appearance fees in 2009/10.
The figure - obtained by the news agency
Bloomberg under a freedom of information request - is up 20 per
cent on the previous year's.
HM Revenue & Customs' Foreign Entertainers
Unit calculates the UK-taxable income of non-resident sports
professionals by looking at the number of UK events they compete
in, and dividing it by the total they compete in worldwide. This
ratio is then applied to all the professional' income, including
endorsement and sponsorship income that may have nothing to do with
The policy was established in 2008 in a test
case against tennis star Andre Agassi. It has produced good results
for HM Treasury, which is driving HM Revenue & Customs to
maximise its tax take and help reduce the public sector deficit.
But it is prompting an increasing number of top-level athletes to
threaten withdrawal from UK competitions.
The latest to speak is Spanish tennis star
Rafael Nadal, who says he will save himself money by not playing at
this year's Queens tournament in London. Nadal makes over $20
million a year from nine endorsement contracts; Bloomberg
calculates that each UK appearance this year costs him £1 million
If repeated by others, Nadal's action will
make Britain uncompetitive as an international competition venue -
which would lose the country far more revenues than the Treasury
will ever gain by taxing star players. The ATP World Tour Finals
alone may bring GBP100 million a year into the UK, according to a
report commissioned by ATP's sponsor Barclays.
The government is aware of this and has
exempted participants in the 2012 Olympics from the rule. The same
applies to some football tournaments. But those exemptions have
created resentment among other sporting associations, who are
lobbying to have their extended to their own big events.
According to BBC News, UK tennis officials,
including Lawn Tennis Association chief executive Roger Draper, are
in discussions with the Chancellor and Prime Minister to obtain
exemption for foreign players. There is even a veiled threat that
the ATP World Tour Finals could be taken away from London if the
LTA do not get their way in the 2012 Budget.
Two other celebrity sportsmen known to have
kept away from the UK for tax reasons are Jamaican Olympic sprinter
Usain Bolt, and Spanish golfer Sergio Garcia.
There was a similar row over last year's Ryder
Cup golf tournament, held in Wales. Professional golfers revolted
at the prospect of having to pay a huge UK tax bill for playing for
their country, even though they would receive no fees or prizes
from the competition.