Okay, best part of the 2012 Olympics so far? I say David Beckham in a speedboat because David Beckham in anything is always going to win. My kids say the giant Voldemort puppet because, well, puppets.
But the Olympians? I’m guessing it’s a toss-up between marching in the opening ceremonies and the giant tax bill that they’re not going to be paying.
Yes, you read that correctly. Olympians at the games are getting a nice tax break under an exemption passed just for the London 2012 games. If not for the exemption, those at the games might have to pony up some pounds for the Queen.
You see, the Brits, like the U.S., have a tax system that attempts to tax global income. Under British tax law, the amount of tax due is pro-rated based on the number of events that an athlete competes in inside the country; this is in addition to a 50% tax rate on appearance fees. If, for example, an athlete participates in ten athletics events in 2012 and one of those events is located in the UK, the Brits take the position that they are more or less entitled to 1/10 of that athlete’s worldwide income (some exceptions apply but you get the idea). The tax is imposed even though the athletes may not live in Britain.
The law has kept big names like Spanish golfer Sergio “El Nino” Garcia and Rafael Nadal out of the country for a number of events. Those omissions made sports news but didn’t make many waves beyond their individual sports. The Olympics, however, is on a completely different scale: you can’t have a competitive Olympics unless athletes from all over the world actually show up – and attendance was threatened by these tax laws. Last year, Jamaican über sprinter Usain Bolt famously declared “I am definitely not going to run [in London]” until the Olympics because of what he viewed as punitive tax laws. His declaration sent the country into a tizzy, worrying that other athletes might make similar proclamations – or not show up for the 2012 Olympics at all.
In order to stem any controversy, the British taxing authorities agreed to a limited exemption to the tax rule. The exemption covers those athletes who are visiting the UK in order to compete in the Olympic Games and a limited number of people who are visiting the UK to work on Games-related activity. It does not apply to those working on the construction of the Olympic venues. Exemptions also apply to certain non-UK residents working for broadcasters. But not everyone gets a break: those working on the construction of the venues (UK residents and non-residents) will have to pay taxes just as always.
Many of the athletes at the Olympics work at something other than their sport for a living. But those that compete professionally – like our American basketball team and many of the world’s best soccer (er, football) players – were especially concerned about forfeiting taxes in order to compete in the Games. Now, they don’t have to.
I’m a big sucker for the Olympics and I will definitely be watching the Games this year (in fact, I’m watching fencing – fencing! – as I post this piece). This year, it’s even more meaningful for me as a mom of two little girls since the 2012 London Olympics are the first Olympic Games in which every nation in attendance has had at least one female athlete. Nothing, it appears, will slow down these games: not gender, not religion, not Lord Voldemort and especially not taxes.
