Former Australian Tax Office auditor Chris Seage writes:

UK Chancellor Gordon Brown did
not do his leadership ambitions any favours last week as he defeated popular
tennis superstar Andre Agassi in the House of Lords in an epic six year battle
royal
over taxes. With Wimbledon just around the corner
the controversial decision will have ramifications for overseas entertainers and
sportspeople who derive income in Britain, including well known Aussies.

The ruling
relates to endorsement money Agassi received from US
sportswear makers Nike and the
Austrian sports equipment manufacturer Head. What is interesting here is that the money paid to Agassi never entered
Britain and none of the
parties are UK based. The Lords ruled
that foreign show business and sports stars working in Britain are liable for income tax on money earned
from sponsorship and product endorsements, even if the money never enters the
UK. The Law Lords agreed with UK’s Revenue & Customs office that since
Nike and Head paid Agassi for appearances in Britain, it
should take a share of his income. It follows a worldwide trend by revenue
authorities to ensure they get their “fair share”.

The
ruling will have ramifications for many of our popular entertainment and
sporting heroes such as Lleyton Hewitt, Greg Norman, Alicia Molik, Kylie Minogue
and even the stars on Home and Away. This latest news comes on top of reports that
many Australian sports stars and entertainers have been caught up in Operation
Wickenby, Australia’s largest multi-agency
investigation into tax fraud. The SMH reports that two of the nation’s most
famous entertainment figures, along with three prominent lawyers, a businessman
and a crime figure, have lost their battle to stop the Australian Crime
Commission’s investigation into money laundering and tax evasion.

Peter Fray

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