UK tax set to fall on Bolt,Olympians

Kwesi Mugisa, Staff Reporter

Jamaican sprint king Usain Bolt and other athletes competing at next year's London Olympic Games could still be caught by the net of the UK taxman, as it has been revealed that the waiver in place for the duration of the event will only apply to work done with the official sponsors of the event.

In other words, the athletes will have to dip into their pockets and fork out the change once any promotional work done during the event is not for the competition's official partners.

With sports apparel manufacturers adidas - rivals to World and Olympic champion Bolt's Puma brand - listed among the official sponsors, a conflict is likely to be on the horizon not just for him, but several of track and field's elite athletes.

Due to the UK's stringent tax laws, Bolt had already publicly stated that he would not compete in the region until the laws were changed.

Endorsement income tax

Sports stars taking part in tournaments in the UK are liable to pay income tax on their earnings or appearance fees, similar to most other places.

However, the UK is different in that the authorities also seek to tax a part of the athlete's global endorsement income.

In the case of the Jamaican sprint double world record holder, it could result in a case where he pays more in taxes than he earns while in the UK.

When London put in a bid for the Games six years ago, the International Olympic Committee were assured that non-resident athletes would not be taxed on the Games-related income earned.

Similar measures were put in place in order to host this year's Champions League final.

And, based on the bill enacted last summer, non-resident athletes will be exempt for the period March 30-November 8, 2012.

Understanding provisions

However, according to Pete Hackleton, a senior tax manager in the sports and entertainment group at accountants Saffery Champness, athletes may not understand the provisions.

"Since the release of guidance last year, it has been assumed that any UK appearances in that period, with the exemption of annual UK events such as Wimbledon, will not be subject to UK income tax," Hackleton was quoted as saying yesterday on UK website thisismoney.co.uk.

"However, the FEU have recently confirmed that any UK appearances on behalf of sponsors not directly linked to the Olympic Games are not covered by the exemption and they will seek to collect UK tax.

"Athletes assumed that they would not be taxed in the UK during the Olympics and would be unpleasantly surprised by such tax demands. It would be a further embarrassment on the international sporting stage for the UK Treasury," Hackleton wrote.