When sportspeople come to the UK to compete in an event they are subject to UK income tax on earnings derived from that appearance, including a proportion of sponsorship and merchandising income.
Exemptions from income tax and corporation tax were provided for the 2012 Olympic and Paralympic Games, and income tax exemptions were provided for the 2011 and 2013 Champions League finals and the 2013 London Anniversary Games.
These exemptions were introduced to ensure that international sportspeople were not deterred from appearing at these events because of the UK tax liabilities they would suffer under the normal rules.
However, these exemptions required specific legislation.
The proposed measure, to take effect when Finance Bill 2014 receives Royal Assent, will introduce a power allowing the Government to make future income tax and corporation tax provisions for major sporting events using secondary legislation.
In future, the Government will be able to extend exemptions to major sporting events without the need for specific legislation.