UK Gives Commonwealth Games Athletes Tax Boost

by Robert Lee, Tax-News.com, London

Monday, January 30, 2012

Athletes resident outside of the UK who compete at the 2014 Commonwealth Games will be exempt from income tax, the government has announced.

The Games, which will be held in Glasgow, will benefit from an exemption similar to that in place for the forthcoming London 2012 Olympic Games. According to the Treasury, the decision will help spread the Olympic legacy into Scotland and encourage top athletes to compete at the Commonwealth Games.

Under UK tax rules, any sportsperson not resident in the UK is subject to UK income tax on any payment in connection with their performance within the country, including a proportion of any worldwide endorsement income. The exemption will include any appearance fees, plus the proportion of worldwide endorsement income related to the Glasgow 2014 appearance that HM Revenue and Customs (HMRC) would normally tax. The sportsperson will remain liable to tax in the country in which they are resident.

The exemption is for competing non-UK resident athletes only. Supporting personnel and team officials will be subject to UK income tax, should they have any UK taxable income. UK resident athletes will pay income tax in the UK as normal.

The Treasury has said that the government generally only grants tax exemptions for sporting events where tax exemptions are a necessary condition of bidding for an event that is at the highest level of world sport. However, the government is making a special exception for the Commonwealth Games, because it believes that by supporting the Games it will help to prolong the legacy of London 2012 and spread the Olympic legacy to Scotland.

Making the announcement, Danny Alexander, Chief Secretary to the Treasury, said on January 26 that: "With six months tomorrow to go until London 2012, I'm pleased to announce this special exemption for Glasgow 2014 which will prolong the Olympic legacy and help spread the long-term benefits into Scotland. Everyone wants to see the best athletes compete at Glasgow 2014 and this exemption will make that more likely."

Minister for Commonwealth Games and Sport, Shona Robison added: "I am delighted that an agreement has been reached to exempt international competitors from tax on any income arising from their appearance in the Commonwealth Games. We want to deliver a memorable Games which attracts the cream of Commonwealth athletes to Glasgow 2014. Today's announcement is a giant stride forward and follows productive discussions between the Treasury, the Scottish Government and the Glasgow 2014 Organising Committee."