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In this section:
  • Additional information for non-UK resident competitors at the 2012 Games

Additional information for non-UK resident competitors at the 2012 Games

This guide provides additional information on the tax exemptions for non-UK resident London 2012 competitors. Please note that although the normal tax regulations applying to non-resident sportspeople performing in the UK have been suspended in relation to Olympic activities you may still be liable to pay tax in your country of residence on income earned in the UK.

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What is a competitor?

A competitor is any individual who has been entered, by a National Olympic or Paralympic Committee, to perform in a sporting event that forms part of London 2012. Competitors must hold an Olympic or Paralympic Identity and Accreditation card.

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Normal regulations

If a non-UK resident individual performs in a sporting event in the UK they are usually liable to UK Income Tax on any income they earn that is related to that performance. This includes any payments directly related to the performance, sponsorship or endorsement income and payments for other activities that are related to the performance such as TV appearances.

UK resident payers have an obligation to withhold UK Income Tax from any payments they make to non-resident competitors. These are effectively payments on account for the individual concerned whose final liability to UK tax is then confirmed when they submit a UK tax return.

The amount of any sponsorship or endorsement income that is liable to UK tax is calculated using a ratio of UK performance and practice days to worldwide performance and practice days.

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What does the exemption cover?

The exemption from UK Income Tax covers any financial or other rewards received by competitors as a result of their performance at the Games, or as a result of any activity carried out primarily to support or promote the London 2012 Games, or the Olympic or Paralympic movement. The payment or reward must be earned between 30 March 2012 and 8 November 2012.

The actual exemptions will depend on the details of an individual's contract or contracts, for example:

  • If a contract includes a reward for the competitor specifically for their performance in the Games, perhaps by providing a payment for winning a medal, that payment will be exempt from UK tax.
  • If a contract rewards the competitor for competing in general, and is not specifically linked to individual events, the amount of any payment under that contract that is chargeable to UK tax will be calculable using a ratio that excludes days of performance at the Games.

The following examples of exempt income may be useful:

  • If an individual is paid to give a trackside interview this income will be exempt providing the interview does not cover any commercial issues such as kit recommendations, or any other type of commercial product endorsements.
  • If an individual is eliminated from competition and joins a media body as a commentator or pundit, their income for commenting on the Games will be exempt.
  • If an individual is paid to promote London 2012 or to promote the next Olympics as part of the organised handover event, for example by appearing in an advertisement or making a personal appearance, the payment will be exempt.

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Endorsement income

The way that the exemptions will apply to endorsement or sponsorship income will depend on the specific contract. But generally:

  • Where an individual receives endorsement or sponsorship income which is not directly linked to an Olympic performance, then any days in competition at the Games will not be counted towards the number of UK performance days or towards the number of worldwide performance days.
  • Where income from an endorsement or sponsorship is specifically contingent on Olympic performance then the days in competition at the Games will not be counted towards the number of UK performance days but will still be counted towards the number of worldwide performance days.

The following example illustrates two possible situations:

An individual has an endorsement (sponsorship) contract which links their endorsement payment to their sporting performances. They compete and train for 250 days in the year, 21 days of which are in the UK. The individual would usually pay UK tax on 21/250 of the income less allowable expenses. If seven of the UK performance days are in a London 2012 event then there are two possible results to arrive at the revised amount that would be chargeable to tax in the UK. They are:

  1. If the sponsor is one that provides sports kit that cannot be used in the Games then these days will not form any part of the calculation of taxable income. The amount that will remain chargeable to tax will be 14/243 i.e. excluding the seven days performing at London 2012 from both the numerator and the denominator.
  2. If the sponsor is one that provides sports kit that can be used in the Games then the seven days will only be excluded from the UK part of the fraction. The amount that will remain chargeable to tax will be 14/250 i.e. excluding the seven days performing at the Olympics from the numerator only.

The income that is exempt from UK tax may still be chargeable in the competitor's country of residence.

The obligation on the payer to withhold tax from payments to non resident sportspeople is lifted during the exemption period for payments covered by the exemption.

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What is not covered by the exemption?

The exemption does not cover any financial or other reward that is:

  • earned outside the exemption period
  • not connected to the individual's performance in the Games or connected to activity primarily to support London 2012, the Olympic or Paralympic movement
  • earned for performing in an Olympic sporting event as a result of entering into a contract on or after 25 July 2012 or any amendment to an existing contract on or after 25 July 2012
  • earned for performing in a Paralympic sporting event as a result of entering into a contract on or after 29 August 2012 or any amendment to an existing contract on or after 29 August 2012

The actual exemptions will depend on the details of an individual's contract or contracts but the following examples of non-exempt income may be useful:

  • Any payment or bonus, from an existing endorsement contract, that is not specifically related to performing in the Games. For example a payment received for appearing, or prize money won, at a different event in the UK within the Games exemption period would not be exempt and the performance days would not be excluded from the ratio calculation.
  • If an individual is invited to appear as a guest presenter on a radio or television show, and the content of the broadcast is not related to the Games, the income would not be exempt.
  • If an individual is paid to endorse a commercial product as an Olympic or Paralympic winner, any income from this endorsement will not be exempt.
  • If as a result of their performance in the Games an individual is awarded a new endorsement contract, the income arising from that contract will not normally be regarded as income arising from the Games even during the exemption period.

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More useful links

Find out more about the UK taxation of visiting performers, including sportspeople, in the Foreign Entertainers Unit guidance

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Contacting HMRC

If you have checked the HMRC website, and you are still unable to resolve your query, you can contact the HMRC Taxes Helpline.

Contact HMRC Taxes Helpline

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