Usain Bolt Serves the UK an Olympic Hangover
Usain Bolt sprinted out of the United Kingdom as quickly as he sprinted in the sovereign state.
Today the Wall Street Journal is reporting that the Jamaican sprinter will forego future races in the UK in order to avoid a large tax bite on potential future winnings there.
The UK is unappealing to foreign athletes because of its tax base. Not only does the base include any winnings earned by nonresident athletes on UK soil, it also includes their worldwide endorsement earnings. Multiply the tax base by the proportion of days spent in the UK to days spent elsewhere, and that’s the tax bill.
Considering Bolt currently has a $9 million annual endorsement deal with Puma, I can’t say I blame him.
The UK tax base is not standard. Here in the States, the tax base includes endorsement earnings paid by American sponsors only. Endorsement monies paid by non-American sponsors aren’t included. France’s base mirrors that of the U.S.
This isn’t the first time we’ve seen an athlete limit appearances in the UK because of taxes. Rafael Nadal, for example, had said he would not play at the 2012 Aegon Championship at Queen’s because of its tax base formula.
I suspect Nadal had little to no reservations with his decision, as there’s an abundant number of other major opportunities to participate in each year. Not quite sure whether we can say the same about track and field. But if Bolt will continue to ink major endorsement deals without having to set foot in the UK going forward, it’s the UK’s loss in the end.
(Hat tip: TaxProf Blog)