Tax free football for finalists

01 May 2024

It’s not often that footballers can get excited about UK tax law but new legislation published last week is good news for those competing for a spot in the Champions League final, with the publication of the catchily titled The Major Sporting Events (Income Tax Exemption) (2024 UEFA Champions League Final) Regulations 2024.

The Champions League Final is considered by many to be the pinnacle of club football, with estimated viewing figures of more than 100 million people, and it returns to Wembley for the first time since 2013 on 1 June 2024. Unfortunately, there will be no representatives from British clubs following Manchester City’s and Arsenal’s elimination at the quarter-final stage of the competition but that makes the passing of this new tax legislation even more important.

When a non-UK resident sportstar or entertainer earns income and prize money from an appearance in the UK, they can be liable to UK income tax on such income. That can include appearance fees and bonuses paid by sponsors for appearing in UK based sports tournaments, such as Wimbledon. The UK’s tax treatment of non-UK resident sports stars can get quite complicated compared to some other countries as the UK also seeks to tax a proportion of a sportsperson’s endorsement income for the year.

As a result of these complications, it is increasingly becoming a condition in the bidding process for such events in the UK that an income tax exemption is provided in relation to those involved in it. Similar income tax exemptions have been put in place in relation to the UEFA Euro’s women’s and men’s football tournaments in 2021 and 2022, as well as the 2022 Commonwealth Games in Birmingham.

Following changes announced in the 2014 Budget, it is now quicker and easier for the government to accommodate requests for income tax exemptions to help attract the world’s best sporting events to the UK, introducing it through secondary legislation as it has in this case.

As a result of these Champions League Final regulations, an income tax exemption will be granted to any non-UK resident UEFA accredited individual who receives an income between 28 May 2024 and 2 June 2024 in connection with the match.

If the UK is to remain competitive in attracting world-class sporting events to its shores then it needs to continue being flexible in its approach to how it taxes the participants in them. Whilst dividing lines are being drawn between political parties in an election year, this is one area there appears to be complete agreement.