Players and staff of UEFA Champions League (UCL) finalists Borussia Dortmund and Real Madrid will pay no tax on UK earnings when they meet at Wembley Stadium on 1 June 2024.
This is due to a one-off Income tax exemption announced by HMRC for the 2024 UCL final, which could save ‘accredited individuals’ participating in the event up to six days of tax liability between 28 May-2 June.
The exemption applies to non-UK tax residents and is expected to benefit some 60-70 players and coaches whose attendance is accredited by UEFA, as well as match officials and other designated individuals involved with the final.
Commenting on this, Azets tax partner Lee Stott, said: “The UK is fairly unique when it comes to sporting events for non-UK residents as we deem the income earned from the events undertaken in the UK as taxable UK income, as well as any portion of income relating to a sportsperson’s image rights, bonus payments and endorsements. Non-resident football players and coaches are coming to the UK to carry out a ‘relevant activity’ – a sporting performance, in this case – and this is caught by the ‘Artistes and Sportsmen Article’ in the various tax treaties the UK has with countries around the world.
“For example, a Spanish footballer will be Spanish tax resident and therefore we look to Article 16 of the UK/Spain tax treaty. This says that income arising to a sportsman who is resident in Spain which relates to activities undertaken in the UK can be taxed in the UK. Therefore, a portion of the Spanish salary which relates to UK workdays would be taxable in the UK without this exemption offered by the Treasury.
“Non-playing staff are also exempt from tax under a different article under the tax treaties as employees, so do not require a special exemption. Most developed countries in the world have some form of tax regime which catches ‘Sportspersons and Entertainers’ and the UK’s version is called the Foreign Entertainers Unit (FEU) regime.”
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By GlobalDataHMRC’s announcement follows similar tax exemptions that were in place for the UEFA Women’s EURO 2022 final between England and Germany at Wembley and the London 2012 Summer Olympics, among others.
Stott concluded: “Regular tournaments such as Wimbledon or The Open do not get exemptions as they are only usually handed out for one-off special events in order to attract investment. This will be a welcome relief for any non-resident individuals participating in the 2024 UCL final.”
