Sunday 17 November 2019

Greedy UK Revenue make 'Links Swing' a non-runner

Phil Mickelson of the US smiles as he holds the Claret Jug after winning the British Open
Phil Mickelson of the US smiles as he holds the Claret Jug after winning the British Open

Karl MacGinty

PHIL MICKELSON can give more than £1m reasons why international golfers usually don't – and probably won't – play a European Tour event in Britain the week before the Open.

If US business bible 'Forbes' can be believed, Mickelson will pay a whopping 61.2pc tax in Britain and the US on the £1,445,000 prizemoney from his back-to-back victories at the Scottish and British Opens.

Take into account the cut he paid to his caddie Jim 'Bones' McKay (the average win bonus is 10pc) and other travel, accommodation and food expenses incurred by the Mickelson clan during their trans-Atlantic hop on his Gulfstream, and Lefty is left with an estimated £433,500.

Proposals that the European Tour might attract more world stars to their events by building a 'Links Swing' around the British Open, the only Major on this side of the Atlantic, inevitably will be stymied by the tax regime in the UK.

Forbes claim that under the British tax regime (which sets a 40pc rate above £32,010 and 45pc once earnings reach £150,000), Mickelson will pay HM Revenue £636,069 income tax on his recent winnings.

Even more prohibitive to international sports stars is a policy the UK shares with the US and few other governments of taxing endorsement and sponsorship revenue earned by non-resident athletes.

For example, after two weeks in Scotland, Mickelson (below) will be liable to pay 45pc tax on 1/26th of his yearly income from this area. That's a substantial sum, given Lefty's off-course earnings were estimated at $44m per annum by Forbes last month in their annual list of the world's best-paid sportsmen.

Though US Federal authorities allow credits for taxes paid abroad, this is not the case with state taxes, so Mickelson, as a California resident, must also pay 13.3pc of his Scottish winnings, some $288,000, to his home state.

This helps explain why many leading golfers, from Tiger Woods to Rory McIlroy (and maybe Mickelson in the near future), live in Florida, one of several states which do not levy income tax.

The European Tour, of course, might find it easier to attract US megastars if they staged an event, the Irish Open perhaps, on a traditional links course in the Republic the week before the British Open, as non-resident athletes are not 'ambushed' by the Revenue Commissioners here – for now!

Irish Independent

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