Sports tax yields £68m a year

THE TAX on overseas sports and entertainment stars yielded £68m in 2009/10, a freedom of information request has shown.

Bloomberg obtained figures that showed HM Revenue & Customs collected £56m in 2008/09 from the tax on endorsement income, appearance fees and revenue from overseas stars performing in the UK. This was down from £58m in 2007/08.

The likes of Jamaican sprinter Usain Bolt and Spanish tennis player Rafael Nadal (pictured) have spoken out against the UK tax system. Bolt has avoided performing in the UK for tax reasons, while Nadal told reporters he would not play at the pre-Wimbledon Queen's tournament because he would "lose money".

HM Revenue & Customs calculates tax owed by sports and entertainment stars based on the number of events they compete in as a proportion of the total number of events worldwide. Therefore, if a sportsperson competes in two events in a year, one of which is in the UK, then they would pay tax on half of their worldwide endorsements.

Sean Bannister, tax manager at Lass Salt Garvin, said: "The punitive taxation of overseas sports stars appearing in events in the UK means that those athletes at the very pinnacle of their profession are in some cases actively seeking to avoid the satellite events held before and following the major tournaments.

"Not only does this make the UK uncompetitive in regard to the hosting of such events, it also means the fans suffer."

Bannister said the fact that the Olympics and the 2011 Champions League final were both given partial exemptions highlights the unfairness, adding that HMRC should review the system to protect events such as the British Open and Wimbledon.