As the dust settles on the European tournament the Prime Minister has outlined a joint UK and Ireland intention to host the World Cup in 2030, but this won’t even get off the ground unless requests from FIFA for a tax exemption are agreed.
Most sports fans have no idea that when foreign sportsmen and women, or entertainers, come to the UK to perform they are usually liable to pay tax on their earnings from those appearances.
This is true of footballers, tennis players coming to play at Wimbledon, Golfers for the Open, NFL players taking part in matches played in the UK or athletes competing here in Diamond League events.
Not only are these sportspersons taxed on the income earned for the event in question, but the UK also taxes their sponsorship retainers and bonuses.
This tax burden is a sore point and has led in the past to stars such as Usain Bolt, Rafael Nadal and Roger Federer speaking out about what they see as an unfair system, arguing they might effectively lose money for performing here.
What annoys them even more is how the tax that they owe is calculated. It is based on a ratio of the number of days worked/performed in the UK over the number of days worked/performed overall in the year. An early Wimbledon exit could be more costly than just player’s ranking points, when a large part of annual Sponsorship has just been taxed for minimal winnings.
When it comes to the big events, then the Government has to bow to these bodies’ requests. UEFA demanded as part of the agreement of allowing the UK to host matches for the Euro 2020 tournament (albeit played in 2021) that no accredited persons’ (meaning anyone accredited by UEFA for their position as an employee, or for official UEFA broadcasters, or players or coaches of the national teams, or even referees and match officials) would be subject to tax on their income earned from performing in the UK for any of the period of the tournament’s duration. This was of course ratified in Parliament without opposition, but if you are talking about a joint bid with Ireland, then they are going to have to agree the same.
This is not a one off. These kinds of exemptions have been handed out many times before with the Olympics in 2012, the Champions League final in 2011 and the World Athletics Championships in 2017.
The Government needs to be confident that hosting a major event is going to offer a significant boost to the economy, not through direct collection of taxes on those taking part, but on the increased revenues of the resident businesses and individuals who benefit from the event being staged in this country.
This will all trickle through via increased VAT, Corporation Tax and Self Assessment receipts, but is not immediate and cannot be relied upon. England’s recent success in Euro 2020 will have added significant revenues to pubs, takeaway and retail outlets, but an early exit of a host nation can be a devastating blow to the interest in the rest of the tournament and the receipts that follows.
However, when it comes to hosting the World Cup, the Government needs to accept the requests of FIFA for a tax exemption, or football won’t be ‘coming home’ again anytime soon.
Would you like to know more?
If you would like to discuss the above or how it may affect you, please get in touch with your usual Blick Rothenberg contact or Paul Haywood-Schiefer, using the details on this page.
For any press queries, please contact David Barzilay whose details are on this page.