With tennis season in full swing, and overseas players spending time in the UK for Queen’s and Wimbledon, it is interesting to consider the tax implications for those players.
Regardless of tennis ranking or level of winnings, every player at Wimbledon faces a potential UK tax liability. Of course you might expect a player who actually receives earnings from a UK tournament to pay UK tax on those earnings. They may also face tax on the same earnings in their own country with (usually) credit for the UK tax suffered, though they won’t get a UK tax refund if the UK tax suffered is higher than the tax in the home country.
However, it is not always appreciated that the players also face a UK tax charge on a proportion of their worldwide sponsorship and endorsement fees, even if those fees are paid outside the UK by a non UK entity and never come into the country at all.
A few years ago, André Agassi tried to argue against HM Revenue & Customs’ decision to tax him on a proportion of his Nike endorsement income, and lost. Indeed some players such as Rafael Nadal have specifically said they will not compete in certain UK tournaments because of the UK tax rules (though Wimbledon seems to remain as popular as ever with players, despite having to pay UK tax).
Perhaps the rules would be easier for players to accept if they were applied consistently. Exceptions have been granted in recent months to football players (UEFA Champions League Final) and athletes (London Athletics Grand Prix) to ensure the UK secured the right to hold the football final here and the appearance of top athletes such as Usain Bolt. Overseas musicians have also asked why the exemption cannot be extended to their performances in the UK.
While no one pretends that the tax system is fair, it does seem that those with more influence such as UEFA can secure a deal with HMRC/the government (perhaps in a similar way to certain corporations) that is denied to others involved in arguably equally important and crowd attracting events.
