UK tax laws repel top athletes

But this might be about to change.

Hydration, shoes, sponsorship, training, diet… tax rules? The last item in that list will not have been weighing heavily on the minds of many runners in the London marathon last weekend.

They are, however rather more of a consideration for international athletes competing in UK pro-sports events. Thanks to current Treasury policy, entry could easily leave them seriously out of pocket.

The HMRC Foreign Entertainers Unit levies tax on foreign sportsmen and women not simply by reference to earnings made from the events they enter the UK to take part in, but also by looking at global sponsorship income.

At the highest levels of sport, the majority of annual earnings are in the form of such sponsorship arrangements. Sellers of training equipment, drinks, perfumes, watches — even broadband (thank you, Mr Branson) — want a sprinkling of top quality athletic shimmer to help shift their wares. The remuneration for many such favoured athletes makes some of their event winnings look positively mean by comparison.

The UK and US revenues are alone in plundering this branding income of international guests at their championships, matches, games, and competitions — with the result that participation in UK events can appear on stars’ books as a loss-making endeavour.

This policy has in recent years found many top athletes deciding against entering UK events. There is a difficult call to be made as to whether the reputational capital they accrue from appearing in UK events is worth the tax payable. The value a major sponsor may put on their man’s profile in the UK is often quite intangible; the prospect of a bill from HMRC running to tens, or even hundreds of thousands of pounds, is not.

This difficult decision has been averted, however, for two upcoming athletics meetings as after years of lobbying by the sports industry, the Treasury has at last issued a concession to their policy. Buried in the 629 pages of Finance Bill 2013 (only slightly down from last year’s record-breaking 686) lie two clauses that grant exemptions from income tax to accredited competitors at the 2013 Olympic Anniversary Games and 2014 Commonwealth Games. News that Usain Bolt will make his first non-Olympic UK appearance in four years indicates the concession is timely.

This year’s concession is stand-alone, but could augur wider change. The case has long been made that UK plc loses out from its current approach to international sport. The Treasury may see the arrival to our shores of itinerant stars as a cash cow to be milked, but the taxes raised are coming at the expense of more significant opportunities (including the 2010 Champions League final which went to Madrid instead).

The economic rally of Q3 last year demonstrated the value to the UK of hosting international sport. Stand-alone tax breaks encourage competitors to help make such events the international displays of expertise they should be. However, the fiscal atmosphere surrounding them remains tense and the UK could benefit hugely from a permanent softening of its policy.

Edward Keene is from private client law firm Maurice Turnor Gardner LLP. This story first appeared on Spear's magazine

Usain Bolt. Photograph: Getty Images

This is a story from the team at Spears magazine.

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The boy who lies: what the Daily Prophet can teach us about fake news

The students at Hogwarts are living in an echo chamber of secrets.

They can make objects levitate, conjure up spirit animals and harness the power of invisibility. But perhaps the strangest thing about the witches and wizards of the Harry Potter universe is that despite all their magic, they still rely on old-fashioned print media for their news.

Although the Daily Prophet bills itself as “the wizarding world’s beguiling broadsheet of choice”, the reality is that its readers have no choice at all. Wizards don’t have their own television network – the risk of muggles accidentally tuning in was deemed too high – they don’t generally use the internet, and rival publications are virtually non-existent. (No, Witch Weekly doesn’t count.)

JK Rowling clearly sought to satirise the press in her portrayal of the Prophet, particularly through its poisonous celebrity journalist Rita Skeeter and her tenuous relationship with the truth. And in doing so, the author highlighted a phenomenon that has since become embedded within the muggle political landscape – fake news, and how quickly it can spread.

In the run-up to the recent French presidential election, an Oxford University study found that up to a quarter of related political stories shared on Twitter were fake – or at least passing off “ideologically extreme” opinion as fact.

While they don’t have social media at Hogwarts – probably for the better, despite the countless Instagram opportunities that would come with living in an enchanted castle – made-up stories travel fast by word of mouth (or owl.) The students are so insulated from the outside world, the house system often immersing them in an echo chamber of their peers, they frequently have no way to fact-check rumours and form rational opinions about current events.

When the Ministry of Magic flatly refuses to believe that Voldemort has returned – and uses the Prophet to smear Harry and Dumbledore – most students and their parents have no choice but to believe it. “ALL IS WELL”, the Prophet’s front page proclaims, asking pointedly whether Harry is now “The boy who lies?”

While Harry eventually gets his side of the story published, it’s in The Quibbler – a somewhat niche magazine that’s not exactly light on conspiracy theories – and written by Skeeter. He is telling the truth – but how is anyone to really know, given both the questionable magazine and Skeeter’s track record?

After Voldemort’s followers take over the Ministry, the Prophet stops reporting deaths the Death Eaters are responsible for and starts printing more fake stories – including a claim that muggle-born wizards steal their magical powers from pure-bloods.

In response, Harry and his allies turn to their other meagre sources such as The Quibbler and Potterwatch, an underground pirate radio show that requires a password to listen – useful to some, but not exactly open and accessible journalism.

Rowling is clear that Harry’s celebrity makes it hard for him to fit in at Hogwarts, with fellow students often resenting his special status. Do so many believe the Prophet’s smear campaign because they were unconsciously (or actively) looking forward to his downfall?

We are certainly more likely to believe fake news when it confirms our personal biases, regardless of how intelligently or critically we think we look at the world. Could this explain why, at the start of last week, thousands of social media users gleefully retweeted a Daily Mail front page calling on Theresa May to step down that was blatantly a poorly-edited fake?

The non-stop Hogwarts rumour mill illustrates the damage that a dearth of reliable sources of information can cause to public debate. But at the other end of the scale, the saturation of news on the muggle internet means it can also be hugely challenging to separate fact from fiction.

No one is totally free from bias – even those people or sources whose opinions we share. In this world of alternative facts, it is crucial to remember that all stories are presented in a certain way for a reason – whether that’s to advance a political argument, reaffirm and promote the writer’s own worldview, or stop an inconvenient teenage wizard from interfering with the Ministry of Magic’s plans.

Now read the other articles included in the New Statesman’s Harry Potter Week.

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