The World Championship Athletics comes to London this weekend and whilst infrastructure and services have played a major role, the UK’s tax policy may have been the real decider that set Britain apart as an attractive location for major international sporting events.
Paul Haywood-Schiefer, Assistant Manager at Blick Rothenberg, said: “The World Championship Athletics are covered by a tax exemption for non UK resident athletes, meaning that they are exempt from income tax on the income they receive for both competing in and promoting the events, ensuring that the likes of Usain Bolt and the other top billings make the roster.
“The relief follows the legacy of the Olympics in 2012 where it started as a ‘one-off’ exemption for sportsmen and women and what followed was a similar exemption for the London Anniversary Games and the Champions League final in Cardiff earlier this year. Besides raising the profile of an event with the participation of worldwide stars, it also makes a big difference to those lesser-known or up-and-coming athletes trying to break through.”
He added: “The UK has a very complex system for foreign sportspersons and entertainers coming to perform and, without such a tax break these athletes may not come to compete. It is also important to look at the wider perspective of hosting an event such as this which brings jobs, an increase in tourism and spending here, not to mention ticket and merchandise sales, which all bring revenue to the Treasury through taxes. It is also a good way to use infrastructure that was built at great expense to the taxpayer to refill the coffers.”
On the VAT front, all prize money is specifically exempted for all competitors and the rules for appearance fees, sponsorship and endorsement income earned by foreign athletes can also be left out of the VAT net.
Daphne Hemingway, VAT Partner at Blick Rothenberg, said: “Normally, services provided by people who are based outside the UK are outside the scope of UK VAT, even if the fees earned by the overseas sportsperson are in excess of the £85,000 threshold for VAT registration.
“However, if athletes sell any merchandise that is physically located in the UK, then VAT can become due. Even if it is £1 they could be liable for VAT and as a result would need to register and account for it. Failing to do so could land them in trouble with HMRC and leave them facing hefty penalties.”
For more information please contact Paul Haywood-Schiefer
or Daphne Hemingway