UK Tax Laws Rule Out Bolt's Appearance
Jamaican sprinter and multiple world record holder Usain Bolt will not partake in August’s Diamond League Meeting at Crystal Palace, London, on August 13-14. Bolt has cited British tax laws as the reason for his decision.
50% of an athlete’s appearance fee earned in the UK is claimed as tax by Her Majesty's Revenue & Customs. HMRC also taxes a proportion of each athlete’s endorsement deals and appearance fees outside of the UK for the relevant season.
If an athlete competes in 15 competitions worldwide during a season, with one occurring in the UK, HMRC is eligible to tax 1/15 of that athlete’s total income earned from sponsors and appearance fees.
It is thought that the endorsement tax would affect Bolt particularly strongly, as the 23-year-old is the recipient of several lucrative sponsorship deals, one of them coming from clothing company Puma.
Race would cost Bolt
Speaking ahead of Friday’s Diamond League Meeting in Paris, where Bolt will go head-to-head with countryman Afasa Powell in the 100m race, Bolt said that his agent, Ricky Simms, had informed him that competing in the UK would end up costing him money after the tax procedure.
"I am definitely not going to run [in London]," the sprinter said at a news conference.
Bolt, who is earning $250,000 to appear in the event in Paris, would see the more than half of his appearance fee slashed by the endorsement tax.
Organisers of the Diamond League Meeting in London, who had hoped to see the first race between sprinter trio Bolt, Powell and Tyson g*y at the event will be disappointed at Bolt’s decision not to partake.
This year, Bolt has run in the Diamong League Meetings in Shanghai in May and in Lausanne last week. He is schedule to appear in Paris on Friday and in Brussels on August 27.
HMRC won a legal case against US tennis player Andre Aggasi in 2006, where it argued that because part of Agassi’s sponsorship revenues were earned while in the UK at the 2006 Wimbledon tournament, they were taxable in the same.
The strict taxing laws on athletes’ appearances have led the UK to miss out on several sporting events to date.
UEFA has admitted that the 2010 Champions League final was not played at Wembley due to British tax laws, while golf professional Sergio Garcia has stated that he limits his UK appearances because they aren’t lucrative. US players in this year’s Ryders Cup may also be affected by the tax laws.
U.K gives exemptions
In 2011, though, the Champions League final will be hosted at Wembley, as the British government has agreed to waive the rule especially for the event.
The government is doing the same for the 2012 Olympic Games in London, in fear of the biggest earners in athletics turning the games down for economic reasons.
Simms said that Bolt is unlikely to compete in the UK until the Olympics due to the unfavourable economic regulations.
Should the UK be awarded the 2018 FIFA World Cup, the government is said to be prepared to make a similar exception.
The British government is under international pressure to reform the tax laws for athletes who are foreign residents entering the UK to compete.
HMRC has defended British tax laws, stating that the UK is far from the only place where foreign athletes get heavily taxed for their appearances.
It also said that mechanisms are in place for non-resident athletes to claim back the taxes paid in the UK in their home country.
But with worldwide demand for his presence and plenty of more lucrative offers waiting, it’s unsure whether Bolt, or many other athletes, would bother with the paperwork.
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