The lifecycle of an international athlete: Part 3 – Key UK income tax points for non-residents
Continuing our series of blogs for overseas athletes and their advisers, private wealth expert Laura Dadswell outlines the key legal points regarding taxation that should be considered when coming to compete in the UK. Specifically, we address the following questions for athletes:
- Is there specific legislation that I should be aware of?
- Do I need to pay UK income tax?
- Will a service company help me to mitigate tax?
- Do I need to file a tax return?
- Can I reduce my fixed payments?
- Who is responsible for deducting withholding tax and accounting for it to HMRC?
- What if I become UK resident?
- Are there any concessions I can take advantage of?
The UK tax authority (HMRC) struggles with taxing international athletes in a proportionate manner within the current tax system. In particular, the UK will tax not only fees directly related to time spent in the UK, but will also seek to tax worldwide revenue (including image rights exploitation) on a percentage basis with reference to UK appearances in the tax year in question. Early negotiation with HMRC to explore the possibility of reduced withholding tax or to seek tax concessions is key for those sportspersons considering short term appearances in the UK. Different issues arise for those based in the UK for the longer term.
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- Tags: Athlete Welfare | Cricket | Finance Act 2014 | Football | Income Tax Act 2007 | Rugby | Tax | United Kingdom (UK)
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About the Author
Laura, a partner in Penningtons Manches’ private client group, is an international tax and trust specialist with particular expertise in working with US issues and corporate wealth structuring. She is rated in Chambers UK and in The Legal 500.