Living legend Usain Bolt is an unlikely mascot for those who campaign for reform of our tax system, but by confirming that he will continue to avoid competitions in the UK because of the amount of tax he would have to pay, he’s now the poster boy for the movement. If he attended races here, he would be taxed 50 per cent on his global sponsorship and endorsement earnings, and on any appearance fees he receives. The Treasury granted an exemption for the Olympics to ensure athletes would not stay away because of the hit on their earnings. ‘As soon as the law changes, I’ll be here all the time,’ Bolt said.
This has inevitably attracted the sort of moralising about paying tax that ministers normally make a superb mess of. The Staggers blog calls on Bolt to ‘reverse his stance’, asking whether it is ‘utopian to hope that athletes might be motivated by something other than money’. Let’s ignore the fact that Bolt’s £12.7m annual earnings are chicken feed compared to the packages top footballers enjoy, and that he turned down scholarships to US colleges because it was more important to him to run as a Jamaican. What matters is that Bolt doesn’t need to compete in the UK. He’s the fastest man in the world: the UK needs him more than he needs to come here for non-Olympic race meetings. Declan Pang points out on the TaxPayers’ Alliance blog that Uefa admitted in 2008 that British tax laws had prevented Wembley hosting the 2010 Champions League final. Because athletes stay away from the UK to avoid its punishing tax regime, the taxman misses out on the revenues not just from their individual sponsorship arrangements, but also from entire events. No wonder the Treasury granted an exemption for the Olympics.
HMRC insists that the UK tax regime is competitive, and argues matters have been improved by the decision to take training days into account when calculating how much tax to demand. A spokesman says: ‘It’s hard to imagine non-residential athletes not being better off as a result of competing here.’ Ministers are no more likely to attack Bolt’s stance any more than they are to start doing the Mobot during Treasury Questions. But the sprinter’s case makes it crystal clear that the best are being put off coming to these shores by high taxes.Tags: Tax, Tax reform, UK politics, Usain Bolt