TaxCorporate TaxCelebrity game, set and tax

Celebrity game, set and tax

Richard Madeley and Judy Finnigan, who are anxiously awaiting the results of a tax court ruling, are just the latest in a long line of celebrities to become embroiled in a case against HM Revenue & Customs

Only a fortnight ago, Andre Agassi’s representatives argued in the House of
Lords that the tennis star’s sponsorship income, which was paid from foreign
companies to his US-based company, was not liable to UK tax.

The taxman argued, successfully, that it was entitled to a share of the
income in so far as Agassi earned his fees by playing, and being sponsored to
play, in the UK.

In 1990, former England goalkeeper Peter Shilton won a case over whether or
not a payoff by Nottingham Forest as part of his transfer to Southampton was
taxable.

The courts held that, since Nottingham Forest had no interest in the
performance of his new contract at Southampton, the payment was not part of his
salary and emoluments.

David Frost, the broadcaster, also had a dispute with the Inland Revenue in
the 1970s, when it tried to tax his earnings from US screenings of the David
Frost Show.

Are stars reluctant to take cases against the taxman? ‘They are very
reluctant. They don’t want the publicity. Nor do they want all their financial
affairs laid bare in front of the world,’ says Julian Hedley of Tenon, who
handled Agassi’s case.

John Whiting of PricewaterhouseCoopers says there are reasons why celebrities
are often found in the tax courts. ‘You are talking useful money. There’s also
some quite interesting principles at stake,’ he says.

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