athletes tax in the UK

How are Athletes Taxed in the UK?

15/03/2023tax , Tax Issues , Tax Saving Tips , Taxation

Although this is quite possible that these famous athletes can have many opponents for the fame they have earned from their field. This is all because of the HMRC’s austere tax laws that are not sparing the struggle of tax even if this is about celebrities or famous athletes. Sometimes this becomes hard to believe that even the fastest athletes and the several-time gold medalist alive in the UK can have opponents like HMRC. This brings up queries in the mind of common people in the UK regarding how athletes’ tax in the UK  is implemented, what is the relation of the double tax treaty in this regard, and whether is there any positive result of this feud. Realising the need based on the frequently asked questions, we have compiled this comprehensive guide that will help you to gather information about all the possible basics.


Talk to one of our intelligent and clever professionals to get your further queries about athletes’ tax in the UK. We will ensure to come up with the best possible solution.


Athletes Versus Tax Laws

There are cases observed in relation to tax implementation by HMRC and the resistance of athletes to HMRC in the UK. This normally has nothing to do with any physical opponents. Because mostly these cases belong to the sprinters. In the year 2010, an athlete decided to compete in Paris rather than focusing on the fulfilment of Aviva London Grand Prix commitment. And here it was considered a way of ditching the rules. Later an athletic event took place in London and the athlete also declined the invitation to be involved with the event happenings. After they were questioned, it was told that the tax involved in the activity was expected to be more than the appearance fee which made them decline the invitation.

This is also because of the fact that the appearance in the event will end up giving a big chunk of the figure £100,000 to be given to HMRC, which will be of no benefit to the athletes. So the management team decided to drop the idea as it was not worth it and there was no financial benefit involved in the appearance.


Are Athletes Taxed in the UK – What is the Procedure?

When you are a resident of the UK and also hold the status of being a famous athlete, you will have to deal with the regular income tax rates on your earnings. Let us take the example of the player who is part of the Premier League in the UK but also has some foreign income streams like the rental property overseas, the individual will have to pay tax on both sources of income. Usually, the payers are the high earners and this ends up putting them in the bracket of additional tax rate as well which means they will have to pay 45% tax on their income.

Moreover, in case of being a non-resident in the UK and you are a visiting athlete, you will still have to deal with the tax on global sponsorship, global endorsements, prize-winning in the UK, and making even appearances in the UK.


How is this Making Sense that Athletes are being Taxed?

According to HMRC, this makes sense because the earnings possible worldwide can be linked to an event that is taking place in the UK. This makes it the subject of the UK tax. The number of days will be divided into the tax bills of such athletes cases who compete in the UK and in other countries as well. If you see the great book of arithmetic, this concept will be considered as the HMRC Maths. In the year 2012, it was announced that the practice days of the athletes will also be considered and taxed in the UK. This explains that if the athletes arrive in the UK a few days before the game for the sake of practice, they will be taxed on these days of practice as well.


What is the role of the Double Tax Treaty?

In common words, we can explain the double tax treaty as an agreement that works between two countries to stop the athletes or other workers who are working in the scenario of two countries to pay the tax twice. Here it seems like the problem is solved, however, after having the double tax treaty with several other countries, the countries still give go-ahead to HMRC to tax the athletes twice in certain cases. This is normally on the sponsorship income, endorsement income, and UK income.


What was the result of this Feud?

This ended up with the athletes turning down several appearances in the UK events. Also one of the athletes refused to be a part of the Olympics in the year 2012 because that tax break was not announced by HMRC. However, after the year 2012, the regular practice of HMRC and tax law were back into the game and even till the date, the athletes who are visiting for the competitions are being taxed on the same kind of tax rules. However, back in the year 2012, this scenario was boldly published by social media and public magazines as well. Many players were of the view that the tax liabilities are making it hard to play in the UK and some of them opt to stay quiet on this issue.


The Bottom Line

Now that you have gathered a fair amount of information about athlete’s tax in the UK, we can bring the discussion towards wrapping up. This is quite surprising for many people that athletes are being taxed in the UK. However, there were several issues observed in the past that went against the strictness of the tax law. But to date, the rules remained the same and the athletes are being taxed in the same manner after all the journey and struggle to call it off in the UK. So it is better to be aware of the facts and requirements about the tax implications if you are an athlete and playing in the UK.


If you seek professional help to learn more about athlete’s tax in the UK, why wander somewhere else when you have our young and clever team of professionals at CruseBurke?


Disclaimer: All the information provided in this article on how athletes are taxed in the UK includes all the texts and graphics. It does not intend to disregard any of the professional advice.

Related post