While most sports spectators have been fixating on Tiger Woods' terrible play, professionals who play the game are fighting a tax battle with Great Britain.
Participants in one of golf's premier events, the Ryder Cup, want to be let off the tax hook.
Under current law, HM Revenue & Customs (HRMC) imposes levies on athletes' worldwide endorsement earnings. That means that if a sports star plays, for example, in two tournaments a year and one of those events is in England, the athlete could be charged 50 percent tax on half his or her total annual sponsorship money.
The tax can be traced back to 2006, when U.S. tennis star Andre Agassi was ordered to pay tax on a portion of cash paid to him by Nike and Head because he endorsed their products at Wimbledon and other events in the United Kingdom.
Pro golfers worldwide are upset: Non-British golfers, from the United States as well as other European countries, are finding the U.K. tax as frustrating as a bad drive.
They won't receive any prize money for participating in this year's Ryder Cup competition at Celtic Manor Resort in Wales that pits U.S. and European golf teams against each other. These non-British golfers will, however, have to pay taxes to Great Britain on their sponsorship deals.
British tax officials defend the system, arguing that the United States, Australia and South Africa operate similar tax regimes and that foreign residents in more than 100 countries can claim tax relief under double taxation agreements.
Still, many players in many sports don't want to have to hassle with getting their money back. They don't want to pay it in the first place and have been avoiding British-based competitions because of the tax.
Making exceptions: They might just get their wish. A waiver of the tax is not unprecedented.
Athletes coming to the London Olympics in 2012 won't face the tax. Neither will footballers who play in next summer's soccer Champions League final at Wembley Stadium.
"Our aim is to attract the best players to provide the best entertainment for our audiences in the U.K. This tax rule is seriously hampering our efforts," European Tour spokesman Mitchell Platts told the Associated Press. "Discussions continue to take place with the HMRC and these discussions include the Ryder Cup."
So as the Ryder Cup nears — it's set to tee off Oct. 1 — look for some changes to come, either to the British tax collection system or to the roster of participating players.
Related posts:
- British taxes drive off sports stars
- The shared tax troubles of rich athletes and telecommuters
- Bronx Bomber in tax dispute with NY
- Tax-exempt bonds and sports facilities
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