Wimbledon's neighbors have been covering their houses with banners for years: "Save the park. Elitist exploitation", can be read in the surroundings. The Grand Slam has bought land to build a new stadium, a new parking lot, and dozens of courts, and the cement is driving people away. There have been protests, but the Government and the City Council have already granted the permits, and only the Judiciary's approval is pending. Nothing can stop Wimbledon's expansion due to its impact, tradition, and above all, money.
No other sporting event contributes as much annually to the British public coffers. Tourists feel it, paying a minimum of 200 euros for tickets, and so do the tennis players. In the United Kingdom, they pay more taxes than anywhere else; sometimes, they even end up owing money. "I lose money if I play there," declared Rafa Nadal in 2011 when tax laws were restructured, and he decided not to play at Queen's as a prelude to Wimbledon. He used to be a regular at the preparatory tournament, but from then on, he only played one more edition. "It's not about the prize money, that's not the problem. It's your tax regime," Nadal denounced.
"There is no other country with a more aggressive tax regime than the United Kingdom," certifies Marta Peiró, an economist specializing in international taxation and founder of Talent Consulting, in conversation with EL MUNDO. All countries tax the prizes of their tournaments: if the winner receives a certain amount, the local Tax Authority keeps a figure that usually approaches 50%. In the United Kingdom, it is 45% for the highest prizes, like the 3.5 million euros for the champion, and 40% for the lower ones, like the 77,500 euros for those who lose in the first round. Out of the 53.5 million that Wimbledon distributes this year, HM Revenue & Customs (HMRC) claims 17 million. But as Nadal said, "that's not the problem."
The numbers don't add up
"In the United Kingdom, non-resident athletes are subject to a peculiar regime. They are taxed on everything that their Tax Authority understands has been generated in the country. All annual income from sponsorships, image rights, or advertising (with Nike, Lacoste, Rolex...) is taken into account, and the proportional part based on the number of days the athlete is in the country training, competing, or participating in events is claimed," Peiró points out, and an example serves to explain this.
If a tennis player participates in Queen's and Wimbledon, they will be in the UK for three weeks to a month. If they win or reach the important matches, playing will be worth it because the prizes are high, but if they lose early in both tournaments, it may cost them money. Let's take Francis Tiafoe as an example. On one hand, this year the American has lost early in both tournaments and will barely earn around 50,000 euros net from prizes. On the other hand, through sponsorships with Lululemon, Yonex, and other brands, he earns around five million annually according to Sportico. After about twenty days in the country and exposed to a 45% tax rate, the British Tax Authority's bill will exceed 100,000 euros, so he could end up paying close to double what he earned.
Thanks to a good advisor, he will deduct expenses for flights, hotels, and even his team's salaries, but playing may still not have been a good deal. "This rule was designed to prevent tax avoidance by sports stars who receive large incomes from advertising and who could previously claim that everything was generated outside the UK," Peiró recalls, noting that Wimbledon and the Champions League have requested exemptions unsuccessfully. Only the London Olympics managed to make HMRC change its rules.
The harm, for the countries of residence
Most tennis players reside in Monaco due to its lenient taxation, but those who do not will have to subtract part of the income from sponsorships and advertising that the United Kingdom keeps from the taxes they pay at home. "The United Kingdom has treaties with more than 130 countries, including Spain. This implies that the United Kingdom has primary taxing authority and that the country of residence, whatever it may be, can allow for a deduction for double taxation," comments Peiró, emphasizing that the United States or France also have specific tax regimes for non-resident athletes, but they are more lenient than those of the United Kingdom.
Players who want to compete in Wimbledon and usually prepare at the nearby Queen's have no choice but to participate because, in case of non-payment, the country can impose a fine and even deny future entry to compete. And year after year, the Grand Slam remains the cash cow for the British public coffers.