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RSSUsain 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.
By George Eaton Published 14 August 2012 8:44
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.
Tags: Olympics
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104 comments
Even at this late stage for my comment I couldn't help it. The article states "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.". Huh?? It appears that Usain now has to follow instructions from someone who is not helping him to earn his money. This is by far one of the silliest articles I have ever seen and I believe it is an attempt to be sensational and thus solicit more attention.
Even at this late stage for my comment I couldn't help it. The article states "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.". Huh?? It appears that Usain now has to follow instructions from someone who is not helping him to earn his money. This is by far one of the silliest articles I have ever seen and I believe it is an attempt to be sensational and thus solicit more attention.
Usain Bolt isn't perfect, but like him or not he's completely right in this case. This is a ridiculous law that needs to be amended. Bolt may be the main focus of this story, but in all fairness any non-British athlete who wants to escape over-taxation should avoid Britain professionally. Taxpayers are supposed to benefit from the taxes levied. Should all these athletes move their families to Britain to take advantage of the benefits their tax dollars provide? Rafael Nadal, for example earns millions from sponsorship. Why should Britain get a chunk of that because of say a single appearance. As things stand, I think Spain, his home country, needs it more.
For the record someone who is not from the UK choosing to avoid the country because of tax laws they don't agree with isn't the same as a rich Briton dodging the taxes he should be paying.
And why should the home state have to refund money Britain has collected? Athletes shouldn't reclaim funds from their home countries where they receive the most benefits. If they must submit a tax return in Britain, taxes paid in their country should be deductible, although that just seems like unnecessary paperwork. By all means tax income earned in Britain, but otherwise the UK taxman needs to keep his fingers out of other jars.
He's a sportsman, he's not British, he's not obliged to do business here. It's not as if he's even living here. Get over yourselves.
If Bolt was taxed only on his UK earnings then there would be some tax money being received by the UK but because of the current law that unfairly taxes earnings outside of the UK NOTHING IS RECEIVED. Sounds like a tax law that cuts off its nose to spite its face. Rather stupid I'd say.
Guess I am fighting a losing battle here - with all you brown nosers who lurrrv Usain.
Personally I am not a fan of Usain Bolt - he is a bigheaded braggart. Furthermore he should be only too happy to pay tax on his earnings in the country he earns the money in!! Usain needs to reflect on the need to stop the greed and PAY IT FORWARD.
This is just plain silly....Why should Bolt pay taxes to the british government for endorsements secured outside of UK? I don't blame him for avoiding UK....Other countries have been sensible enough not to unfairly tax international athletes and its about time the british government does too..
We people are impossible and a bit ignorant. As a businessman he can take is business elsewhere, therefore if ge chides not to compete in the UK it is his business. The law is no fair, plain a simple, he should only be taxed on the money he makes in the UK. I'm sure he has to pay tax in other countries too, like If he competes in France he had to pay taxes. Why show the UK be entitled to tax his entire earnings. People please shut up and go read a book. I sense some discrimination here, but who cares what some editors think.
I'd expect Bolt to pay his 10% to the UK for earnings within the UK, but not 10% on ALL his global earnings. That's just a rip-off! He's being mugged! What kind of tax arrangements does he have with the other countries he earns money in? How about his tax bill in Jamaica?
I don't blame him for staying away from the UK!
I would be happy for him to stay away from the UK too.........he is an impossible big head surrounded by grovelling sycophants - and we don't want him is Australia either.........but guys like him will always have their minions to do their bidding.
I would be happy for him to stay away from the UK too.........he is an impossible big head surrounded by grovelling sycophants - and we don't want him is Australia either.........but guys like him will always have their minions to do their bidding.
"...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. ... Those countries that don't tax non-resident sports people, as Britain does, should do."
So 10% times ten is 100% tax. Sounds fair. Heaven help him if he was to take part in ELEVEN meetings worldwide, though.
I'd expect Bolt to pay his 10% to the UK for earnings within the UK, but not 10% on ALL his global earnings. That's just a rip-off! He's being mugged! What kind of tax arrangements does he have with the other countries he earns money in? How about his tax bill in Jamaica?
I don't blame him for staying away from the UK!
Ah,no it's me having a thick day! Just re-read it and it says "ON" 10% of his earnings, not a straightforward "10% of his earnings".
One point in this article either doesn't make sense, the writer has got it wrong, or I'm having a thick day! George Eaton has written:
"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".
So if we follow the argument above if Usain Bolt then competes in 9 more countries that adopt the UK's position & taxes him 10% he would lose 10 x 10% of his worldwide sponsorship earnings, or in other words every single dollar!
I think tax on 10% means pay the marginal tax rate on 10% of his income so for a 50% tax rate he woudl pay 5%
A temporary visitor does not enjoy public services for the whole year and should not pay taxes as if he/she did. Moreover earnings from sponsorship cannot be attributed to any one nation and if taxed should be taxed on an international basis according to the benefits provided to the visitor by each nation in which he works.
Fairly pointless article.
Firstly how can Usain Bolt be wrong to oppose tax laws, he is a free man, he has a choice of where he competes based on both exposure and economics. He is therefore reasoning that the current tax laws in the UK makes performing in the UK, for him, not economically beneficial. - What is wrong with this, this is what financially smart people do everyday.
As far as I am concerned he has taken the respectable approach and let his reasons be known, rather than leaving it to speculation.
Secondly,
Using your logic, lets say he performs at 10 events worldwide one being in the UK. He gets earns 10 million in total, but perhaps only 100 000 directly from participating in the UK and he is being taxed at 50%. HMRC would want 50% of 10% of his worldwide income, not his UK appearance fee, so he pays 50% of 1m or 500k, how can this be logical for someone that does not even reside in the UK apart from the two days he performed and has no access whatsoever to its tax funded programs, etc. If he pulled a muscle while performing, he couldn't even get access to the NHS without paying.
I wouldn't mind paying taxes so much if I didn't know how badly they are squandered.
I once worked on a government project that cost 2 million pounds, that never ever saw the light of day; it was cancelled when the next govt came in. A colleague said every single govt project they'd worked on ended the same way.
Most of the contractors were on exorbitant daily rates and were from abroad and using offshore tax schemes to avoid UK taxes. The govt itself outsourced as much work as it could to other countries rather than employing our own people.
The whole thing smacks of a racket.
Simply logic makes performing in England more than a financial mistake. Too much intellectual crap. It just makes little sense. Financially that isH
I cannot believe that I just wasted 5 minutes reading this ridiculous piece of writing...ease up on the drugs especially before you write.
I cannot believe that I just wasted 5 minutes reading this ridiculous piece of writing...ease up on the drugs especially before you write.
This article is lunacy. You actually think that Bolt should willingly perform in a foreign country in which they will tax him an amount of money that is greater than his earnings from the performance? Save me some of whatever you're smoking because it's some good stuff!
Why would anyone choose to do that? The man is a professional athlete (one of the most famous ones in the world). His time is valuable. You want him to train, prepare and perform and not be paid for it? In fact you want him to pay the British Government to do his job on their soil! That's just frighteningly absurd. He is not a British citizen nor does he benefit from British public services. The man owes nothing to England.
Oh for the bygone days of "Bert and Dickie"!
So when president Obama comes over to the UK to WORK!!!!!, at a summit, we are going to tax him for the time he is here? ???
Bolt is a national of Jamaica, one must assume he is liable to Jamaican Tax, I can see no reason whatsoever why he should be paying tax anywhere else. When I was working in the Merchant Navy, I did not get taxed in the US, or the USSR or Korea or Japan because I was "working". Its this sort of crass mixed up thinking on tax that means I fully support my plumber/electrician/brickie wanting to be paid in cash.
TAX is too high, the rapaciousness of governments wanting more from everyone is just unreal. I suppose that the writer of this story thinks that companies pay tax and can be taxed more. Duhh! Someone has to pay the levies and charges and taxes and at the end of the day it comes down to the man on the street who has a job who has to cough up in way or another. Governments earn no money of their own, companies use capital to earn money by putting in added value in what ever it is they do, if you put more tax on the company then they have to charge the customer more to cover it, that is YOU and ME.
Deadalus
Honestly. Does the author of this article realise that the effect of the UK's tax system is that Bolt would actually lose money by racing in the UK? In other words, the UK tax payable would be greater than the prize money on offer. Anyone who cannot see that this is unreasonable and punitive needs a bucket of cold water tipped over them. Would you take a job in France if you had to pay the French government to do it? Of course not.
Remember that 50% of nothing is zero.
LEAVE BOLT ALONE! He will race where he wants to race!
Laffer Curve - trickle-down theory by another name. Ronnie tried it and almost got impeached for creative accounting.
Back to Bolt.
You pay income tax, suckka and I don't! Fast food, anybody?
Fast Shuffle
In fairness, the trickle-down theory is as untrue as Marx's claim that the state would wither away after the dictatorship of the proletariat. Both are hastily put together get-out clauses or afterthoughts that conceal injustice.
Um, no, Marx was wrong, but the "trickle down theory" is right - it's just that you don't know what it is. That's not something to be embarrassed about, because few people do, especially those US politicians who peddled it. The real point of the theory is not that spending by the wealthy "trickles down" to the "poor" (a relative term in today's world, where the poor are wealthy by the standards of 50 years ago - so much for "injustice"). It is that the income that the wealthy refrain from spending is what drives economic growth, thus increasing the size of the pie. The main beneficiaries of this are the poor. Disagree? Would you rather be a so-called "poor" person in a developed country today, or the king of England 200 years ago? Think carefully before you answer.
How much aid has been given by the UK to Jamaica?
I get the feeling he won't be protesting about that.
Aid to Jamaica? Are you crazy ? Imaging the Olympics without Jamaica, it would be NBC dream. The UK has raped Jamaica and other colonies for decades.The only reason why most of them are rich is due to the natural resources found in these countries, so when you talk about aid, just remember that the colonies did not have a choice when they were being raped.
How about answering my point. If you want about a discussion about the Empire and not the motivation of one selfish individual.
IAAA...International Amateur Athletics Association !!!!....
First,
- Clear inconsistencies between team vs. individual sports
- Clear issue with dividing the fraction of the liability on athletic event appearances (Brand bolt is a 365 day a year show)
However, for me the underlying question is one for the sponsors. What would the value difference be for an endorsement contract that includes a mandatory appearance at a UK event, vs. no UK appearance? If the UK market actually matters to them, then Mr Bolt's finance team have done the wrong calculation for the long run...
Is it utopian to think that nobody in their right mind would be paid for writing such absolute poppy cock? And I don't use the term poppy cock lightly!
This article makes no sense. Take the line, "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."
If every country in which Bolt competed had the same tax laws, Bolt would pay 100% of his sponsorship earnings to the tax departments of foreign countries. It's no wonder that he refuses to compete in GB.
GB's return for Bolt competing is packed stadiums and the experience of watching the fastest man in the world run. Taxes on tickets sales (and other profits made by English copanies from the event) feed through to Inland Revenue, which can then use the money to put on more tax-funded events. Simple.
He means that the HMRC would say that 10% of the sponsorship earnings were liable for UK tax.
I can't see why this makes any sense, as the sponsors are not paying for his appearance at specific events but for him to do various things throughout the year.
"Bolt would pay 100% of his sponsorship earnings to the tax departments of foreign countries."
No he wouldn't. If all the countries in which Bolt competed had the same tax laws as the UK, he would be liable to pay tax on 100% of his earnings, which isn't quite the same thing. With respect, the reason the article makes no sense to you is because you've misunderstood it.
"If all the countries in which Bolt competed had the same tax laws as the UK, he would be liable to pay tax on 100% of his earnings"
I do not think you quite understand the issue yourself. He already pays tax on 100% of his earnings from where such earnings emanate.
The annoying bit of this article is the idea that Britain affords him the platform to earn money. He was already the fastest man in the world before HMRC came to know BOLT.
Sorry, should've clarified: he'd be liable to pay tax on his earning to those countries. I understand he's probably already taxed on those earnings in Jamaica (or whatever country he's resident in).
To be fair, I don't think Bolt is campaigning for a
change to our tax laws.
He's simply saying he won't race here because of
the way we tax athletes. And if we change our laws,
he may change his mind.
Remember, this guy doesn't owe us anything.
Choosing not to work in the UK isn't being selfish,
it's a career choice!
Sounds like he's been over taxed here being a professional athlete is a job and just like every sportsman and woman out there you want to be paid fairly and its withing his own right not to compete if he don't think it's worth it talking about selfless and all that athletes aren't able to compete forever and maximizing their earnings early without being robbed by your greedy tax is what they have to do so I don't blame him one bit some people are just jealous go hide your faces yes you!
Rich people ducking taxation is the root cause of our present financial dilemma. In other words, greed (aka nakedly selfish capitalism) is the root cause of our present financial dilemma - a dichotomy stubbornly opposing human attainment of genuine civilisation. Which - if only the haves could bring themselves to abide by fair-shares for ALL - would be attainable within a decade or so.
All it takes is for the richest individuals in the land - any land - (no matter how eminent or wonderfully productive such individuals may be) - to accept their personal rewards being no greater than twice - TWICE...! - those of the poorest individuals in that same land. And to allow fair redistribution by proportionate taxation to even-out the creases...!!!
Result - not universal "happiness" perhaps - but something close to national contentment.
Meanwhile, Bolt is perfectly welcome, so far as I'm concerned, to do a runner from these shores and never - ever - come back.
"And to allow fair redistribution by proportionate taxation to even-out the creases...!!!"
Really?
There is some inconsistency here. I understand that individual athletes are regarded as being self employed, whilst team sportsmen - footballers, rugby players, cyclists, cricketers, american footballers - are regarded as employees effectively sent to the UK on a "business trip". I have some sympathy with Bolt's opinion.
It's fact of life that most people want to maximise their incomes. Why else do poor people do the national lottery? Not everyone will fall on their sword and be happy to pay a lot of tax. Egoists have as much right to live as altruists. Both are useful to life. Indeed, isn't there an egoist and an altruist in all of us? Truly embracing diversity means accepting that some are rich and some are poor, that some some are selfish and some are selfless, that some enjoy harming others and some enjoy harming themselves.
The whole debate overlooks the concept of double taxation agreements - usually any tax paid in the UK can be deducted from the tax paid in your home country, so the only loss is to the home country's tax receipts.
Of course, if any international sportsman is basing themselves in a lower tax jurisdiction, then there will be an additional cost to them but not of the levels suggested in the discussion above.
You have missed the point. Its not just about double tax treaties....His worldwide income become UK taxable...Plain and simple, most of his income become taxed at 45% with HMRC taking the top slice up to the 45% point.