Olympians to be given tax exemptions

OVERSEAS OLYMPIC COMPETITORS will benefit from tax exemption from money earned throughout next summer, HM Revenue & Customs has announced.

HMRC said that "any bonus or payment from an existing endorsement contract, that is specifically related to the Games" will be exempt. Usually, a non-resident sportsman will be liable for income tax on payments directly related to performance, sponsorship, endorsement or television appearances when they perform in the UK.

The exemption will apply to any payments between 30 March 2012 and 8 November 2012.

However, the taxman also said that any payments not connected to the Games during this period will not be exempt. Furthermore, any payments from contracts signed or amendments made after 25 July 2012 for Olympic athletes (29 August for Paralympic athletes) will be taxed, HMRC said. This includes money earned at a different event, such as Wimbledon, and advertising of products that are unrelated to the Games.

A HMRC spokesman said: "HMRC has published clear guidance online about the conditions of the exemption to ensure that those who are exempt know about it, and those who need to pay are aware of their tax obligations. The exemption ensures that those coming to the UK to compete in the Games do not pay UK tax on any income arising from the games.

"HMRC has also set up a special helpline for those eligible for the exemption to ask any questions."

Matt Coward, a partner at Price Bailey, said that these rules will be "difficult to police".