The UK has strict rules for taxing international sports stars that compete here – they are taxed on their prize money won here and on a proportion of their endorsements and sponsorship income. This has led to some high profile stars refusing to compete here – for example Usain Bolt, Rafael Nadal. In recent years we’ve legislated to give exemption to some events, including the Olympics. These exemptions are in some cases needed to attract the best tournaments to the UK, and I can’t see a problem for events like the Olympics where there is no prize money.
However last year’s Finance Bill exempted the players in last week’s Champions League Final and this year’s will exempt the Commonwealth Games (again fine like the Olympics as there’s no appearance or prize money) but also the London Diamond League Athletics event – this year known as the Anniversary Games. We’ve never exempted this event before and we aren’t exempting a similar event in Birmingham three weeks earlier.
While there are advantages to having high-profile sporting events here, we should not sell our tax system to the most influential lobbyist. What next? Exempting Monaco-resident Formula 1 Drivers to protect the Silverstone Grand Prix? Exempting tennis players to protect Wimbledon?
You can read here my proposed amendment to the Finance Bill calling for clear rules on the exceptional occasions we will waive the tax on sports starts to stop this annual exercise of rewarding those that lobby hardest.