The long awaited Olympic opening ceremony is here, but what may not have been anxiously awaited are taxes related to the 2012 London Olympics. Josh Ritchie goes for the gold and gives you information about taxes and the 2012 London Olympics.
We don’t commonly associate the Olympics with taxes, but this year, the two will at last collide. In order to secure the 2012 games, London was required to award special tax exemptions to some of the personnel. But why were these exemptions necessary – and what do they cover? Moreover, why are British taxpayers reportedly on the hook for over $2 million in stadium upgrades after the games are over?
We examine these Olympic tax issues in greater detail below:
Who Is Exempt?
Despite assumptions to the contrary, the tax exemptions reportedly will apply only to “a small number of non-residents who are directly involved in the delivery of the games”, according to HM Revenue & Customs. HM adds that “for most people working or supplying to London 2012, there will be no specific tax exemptions in place, and normal tax laws apply.”
It appears, according to the BBC, that these exemptions – which officially took effect on January 1, 2011 – were necessary in order to secure the participation of key foreign professionals, including:
- Representatives of foreign governments, official Olympic bodies like the International Olympic Committee, and host cities for future games
- Equipment technicians
- Team officials
- Referees and judges
Similar exemptions have reportedly been extended to “officially designated Olympic partners who provide a commercial service to the game.” Additionally, performers at the opening and closing ceremonies will not be taxed on performance or rehearsal payments, and the London Organising Committee (largely responsible for putting the event together) will not pay any corporate taxes in connection with the Olympics.
The Rules to Qualify
In addition to being members of the above parties, those seeking the Olympic tax exemptions must meet the following criteria:
- Must be “neither resident nor ordinarily resident” in the UK during the 2012-13 financial year.
- Can only exempt income that is “wholly and exclusively” earned from taking part in the Olympic games
- Can only exempt income earned between March 30, 2012 and November 2012
The only exception to the March-November time frame is for staff working as employees/contractors for Olympic broadcasters, who will receive a longer exemption period (April 6, 2011 to April 5, 2013.)
There is another tax aspect of the 2012 Olympics: taxpayer-funded upgrades to London’s Olympic Stadium. Started in 2007 and finished in 2011, the stadium will apparently require over £2 million in repairs after the games conclude to make the pitch usable for Premiere League football (soccer) games. For unknown reasons, the field (built with the Olympics in mind) currently installed was not designed to Premiere League standards, which mandate under soil heating technology for regulation football games.
Without publicly funded upgrades to remedy the situation, the DailyMail explains, neither West Ham nor any other public club will be able to play at the £486 million stadium.
The repairs would have fallen on West Ham if its long-term tenancy agreement was not cancelled amidst legal problems. Now, the burden falls squarely on the Olympic Park Legacy Company to transform the stadium – and to make matters worse (from a public standpoint) the team could simply end up renting the stadium anyway.