Ready…Steady…Tax!

I’ve commented before on the way that the UK tax system impacts on the way some foreign sports stars view the UK and the issue has again arisen following the announcement that the Diamond League athletic meeting to be held in Glasgow in July has been granted ‘tax exempt’ status.  It has been classed as a ‘warm up’ event for the Commonwealth Games which has already been granted tax exempt status.

Why has this been done?  Well, under UK tax laws, international athletes are taxed not only on any winnings when they attend UK events but also a share of their year-long, world-wide sponsorship deals.  So international athletes just won’t visit the UK unless they are given tax exempt status.  Usain Bolt, for example, didn’t visit the UK at all in 2010 and 2011.

In a climate where some are calling for higher tax rates and fewer exemptions, two thoughts come to my mind.  First, those calling for high tax rates deny that this will cause people to change their behaviour when there is clear evidence that people do and second those who say that it doesn’t matter if some people leave the UK (or don’t come) as there will be others to replace them. Well, perhaps there would be, but in the case of athletics, whilst there might still be eight sprinters on the start line of a race in the UK, would as many people turn up to watch if the line-up was missing all the top stars?

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