Usain Bolt is wrong to oppose our tax laws

The sprinter won't compete in Britain again because he doesn't want to pay more tax.

Amid the drama of the Jamaican team's world record time in the 100m relay, which I was fortunate enough to witness in person, few noted Usain Bolt's post-race comments on tax. Asked why he did not compete in Britain more often (he refused to appear at Crystal Palace in 2010, for instance), Bolt cited our tax laws. "As soon as the law changes I'll be here all the time," he said.

Bolt's objection is to a law that allows the government to take a cut of his sponsorship and endorsement earnings as well as his appearance fee, which is currently taxed at 50 per cent. For instance, were he to take part in 10 meetings worldwide, with one in Britain, the Inland Revenue would tax him on 10 per cent of his worldwide sponsorship earnings. None of which is objectionable. Without tax funded events such as those in Britain, Bolt, who earns around £10m a year, would have no platform on which to perform and, consequently, no sponsorship. Those countries that don't tax non-resident sports people, as Britain does, should do.

The law was waived for the Olympics at the behest of the IOC (one wonders if we would have seen Bolt otherwise) and the government is now under pressure to permanently suspend it. But given the revenue it would lose from those athletes who do grace us with their presence, it is understandably reluctant to do so. Instead, it is Bolt who should reverse his stance and accept that it is legitimate for him to pay a proportion of his worldwide earnings to the British government. After all, having spending £9bn on the Olympics, we could do with the money.

Bolt's management complain that "his tax liability in the UK would exceed his appearance fee". Yet if true, that is only because his sponsorship earnings are so exorbitant to begin with. In any case, is it utopian to hope that athletes might be motivated by something other than money?

Update: Here's what the Treasury had to say on the subject in this year's Budget.

HMRC will revise its practice on the taxation of non-residents sports people to take training days into account when calculating the proportion of worldwide endorsement income subject to UK tax.

Jamaica's Usain Bolt reacts after winning the men's 200m Olympics final. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Why relations between Theresa May and Philip Hammond became tense so quickly

The political imperative of controlling immigration is clashing with the economic imperative of maintaining growth. 

There is no relationship in government more important than that between the prime minister and the chancellor. When Theresa May entered No.10, she chose Philip Hammond, a dependable technocrat and long-standing ally who she had known since Oxford University. 

But relations between the pair have proved far tenser than anticipated. On Wednesday, Hammond suggested that students could be excluded from the net migration target. "We are having conversations within government about the most appropriate way to record and address net migration," he told the Treasury select committee. The Chancellor, in common with many others, has long regarded the inclusion of students as an obstacle to growth. 

The following day Hammond was publicly rebuked by No.10. "Our position on who is included in the figures has not changed, and we are categorically not reviewing whether or not students are included," a spokesman said (as I reported in advance, May believes that the public would see this move as "a fix"). 

This is not the only clash in May's first 100 days. Hammond was aggrieved by the Prime Minister's criticisms of loose monetary policy (which forced No.10 to state that it "respects the independence of the Bank of England") and is resisting tougher controls on foreign takeovers. The Chancellor has also struck a more sceptical tone on the UK's economic prospects. "It is clear to me that the British people did not vote on June 23 to become poorer," he declared in his conference speech, a signal that national prosperity must come before control of immigration. 

May and Hammond's relationship was never going to match the remarkable bond between David Cameron and George Osborne. But should relations worsen it risks becoming closer to that beween Gordon Brown and Alistair Darling. Like Hammond, Darling entered the Treasury as a calm technocrat and an ally of the PM. But the extraordinary circumstances of the financial crisis transformed him into a far more assertive figure.

In times of turmoil, there is an inevitable clash between political and economic priorities. As prime minister, Brown resisted talk of cuts for fear of the electoral consequences. But as chancellor, Darling was more concerned with the bottom line (backing a rise in VAT). By analogy, May is focused on the political imperative of controlling immigration, while Hammond is focused on the economic imperative of maintaining growth. If their relationship is to endure far tougher times they will soon need to find a middle way. 

George Eaton is political editor of the New Statesman.