Policy paper

Major Sporting Events (Income Tax Exemption) Regulations 2021

Published 9 September 2021

Who is likely to be affected

Non-UK resident players, officials and other designated individuals participating in, or otherwise involved with, the UEFA EURO 2020 final tournament football matches, postponed from 2020 due to the coronavirus (COVID-19) pandemic, and now being played in England and Scotland between 11 June 2021 and 11 July 2021 (the ‘UK-hosted EURO 2020 matches’).

General description of the measure

The exemption applies to certain individuals who have been accredited by UEFA for the purposes of the tournament if they are not resident in the UK for tax purposes and earn income in connection with any of the UK-hosted EURO 2020 matches. This includes those individuals whose tax residence is ‘split’ between the UK and another country in tax year 2021 to 2022 where such income arises in the part of the year when they are not UK resident.

The scope of the exemption covers income directly related to participating in the event and income directly related to services and duties performed specifically for the event. Payers of such income will not be subject to the withholding tax obligations that would otherwise apply.

Policy objective

The government is committed to making the UK an attractive location to host international world-class sporting events. The granting of an Income Tax exemption supports this objective where the event in question is internationally mobile and where such an exemption is a condition of the bidding process to host the event.

Previously an Income Tax exemption was a condition of the UK’s successful bid to host the UEFA Champions League Final 2017 in Cardiff.

In the absence of the exemption, subject to the terms of any applicable double taxation treaty, the affected non-UK resident individuals would be fully taxed on their income arising in connection with the UK-hosted EURO 2020 matches, and non-UK resident sportspersons would also be taxed on a proportionate share of their worldwide sponsorship income. Payers of income to non-UK resident sportspersons and entertainers would be liable to withhold UK tax from their payments. This would make the UK less attractive as a host for international sporting events.

Background to the measure

The UEFA EURO final tournaments are held every 4 years and are normally hosted by only one country. However, in order to celebrate the 60th anniversary of the competition in 2020, UEFA will hold the group games of the final tournament (postponed due to the COVID-19 pandemic) across twelve cities in Europe (including Glasgow and London) with the semi-finals and finals being played at Wembley Stadium in London.

The granting of an Income Tax exemption for persons designated by UEFA was a condition of the bidding process for all countries seeking to host matches in the finals.

Both the English and Scottish Football Associations bid to host the UEFA EURO 2020 group games on the basis that the UK Government agreed to the formal requirement of providing an Income Tax exemption if they were successful. Letters were provided to UEFA by the Chancellor of the Exchequer at the time to confirm this.

Both Wembley Stadium in London and Hampden Park in Glasgow were awarded EURO 2020 group games and in addition, Wembley Stadium also won the right to stage both the semi-finals and final matches of the tournament.

Detailed proposal

Operative date

The Major sporting events (Income Tax Exemption) Regulations 2021 will come into force on 31 May 2021. Only individuals earning income liable to tax from duties or services performed between 1 June 2021 and 13 July 2021 inclusive will be affected.

Current law

The legislation outlining the statutory basis for the taxation of employment income for non-UK resident employees, including sportspersons and entertainers, is provided by section 27 of the Income Tax (Earnings and Pensions) Act 2003. The legislation for self-employment income is provided by section 6(2) of the Income Tax (Trading and Other Income) Act 2005, with specific legislation applicable to visiting performers at section 13 of the Income Tax (Trading and Other Income) Act 2005.

In relation to sportspersons and entertainers, relevant withholding tax provisions are set out in section 966 of the Income Tax Act 2007 and the Income Tax (Entertainers and Sportsmen) Regulations 1987 (SI 1987/530).

These regulations provide that the payer of the visiting entertainer or sportsperson is required to deduct the basic rate of Income Tax from any payments made. This withheld tax is then paid to HMRC in the quarterly returns submitted by the payer.

A non-UK resident entertainer or sportsperson is required to complete a Self-Assessment return if they have paid too little tax on the payments received. They also complete a return if they believe too much tax has been withheld and a repayment is due.

The legislation that gives the power to provide for an exemption from income and corporation tax is at Section 48 of the Finance Act 2014. This states that where a major sporting event is to be held in the United Kingdom, the Treasury may make regulations providing for exemption from Income Tax and corporation tax in relation to the event.

Proposed revisions

The Major Sporting Events (Income Tax Exemption) Regulations 2021 provide for an exemption from Income Tax on income earned in the UK by certain non-UK resident individuals in connection with the UK-hosted EURO 2020 matches. The exemption applies to income received by accredited players and officials and other accredited individuals for relevant duties or services performed in connection with the UK-hosted EURO 2020 matches provided that the income arises in respect of duties or services performed between 1 June to 13 July 2021 inclusive.

Regulation 2 defines ‘accredited person’, ‘EURO 2020’, ‘income’ and ‘UEFA’ for the purposes of the regulations.

Regulation 3 provides that accredited non-resident individuals do not have to pay Income Tax on their income where it is earned in respect of duties or services performed in the UK between 1 June 2021 and 13 July 2021 in connection with any of the UK-hosted EURO 2020 matches and in pursuance of the specific role in respect of which the individual has been accredited. It also defines the condition of non-residence in relation to applying the exemption and disapplies the withholding tax requirement contained in section 966 of the Income Tax Act 2007.

Summary of impacts

Exchequer impact (£million)

2020 to 2021	2021 to 2022	2022 to 2023	2023 to 2024	2024 to 2025
–	nil	nil	nil	nil

This measure is not expected to have any significant economic impacts.

Economic impact

This measure is not expected to have any significant economic impacts.

Impact on individuals, households and families

This measure is not expected to impact on individuals as it only affects non-UK resident players, officials and other designated individuals in a business context participating in, or otherwise involved in, the UK-hosted EURO 2020 matches. There is expected to be no impact on family formation, stability or breakdown.

Equalities impacts

It is not anticipated that there will be impacts for those sharing protected characteristics.

Impact on business including civil society organisations

This measure is expected to impact on an estimated 2,000 non-UK resident players, officials and other designated individuals within a business context who are participating in, or otherwise involved with, the UK-hosted EURO 2020 matches. The exemption means that these individuals will not be subject to UK Income Tax on income in connection with those matches where such income arises in respect of their activities in the UK between 1 June 2021 and 13 July 2021. They may still be liable to tax on this income in the countries in which they are resident.

UK resident competitors will not benefit from the exemption. One-off costs will include familiarisation with the changes. There are not expected to be any ongoing costs. Customer experience is expected to stay broadly the same as this measure is around exempting eligible individuals to Income Tax. This measure is not expected to impact civil society organisations.

Operational impact (£million) (HMRC or other)

It is not expected that implementing this change will incur any additional costs for HMRC.

Other impacts

Other impacts have been considered and none have been identified.

Monitoring and evaluation

This measure will be kept under review through communication with affected taxpayer groups.

Further advice

If you have any questions about this change, contact Aidan Close – Business, Assets and International Policy on telephone: 03000 585 255 or email: aidan.close@hmrc.gov.uk.

Declaration

The Right Honourable Jesse Norman MP, Financial Secretary to the Treasury, has read this tax information and impact note and is satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impacts of the measure.