SPORTS PROFESSIONALS

Athletes are generally taxed in the country where they compete, so prize money and appearance fees earned in the US or UK can be taxed there at source. Your country of residence then taxes worldwide income but usually grants a foreign tax credit to avoid double taxation. The US-UK tax treaty includes specific sportsperson rules, making accurate allocation of income by event location essential.

HMRC can tax non-resident sportspeople not only on UK performance income but also on a proportion of worldwide endorsement and sponsorship income, calculated by reference to UK training and competition days. This approach has historically influenced whether top athletes compete in the UK. The calculation is complex and fact-specific, so athletes with major endorsement deals should model UK exposure before committing to events.

The US can require withholding on payments to non-US athletes for US performances, often on a gross basis. Athletes may negotiate a Central Withholding Agreement with the IRS so that withholding is based on estimated net earnings after expenses rather than gross receipts, improving cash flow. Treaty relief may further reduce US tax where the athlete qualifies, but arrangements should be made before the event.

Image rights income—payment for use of an athlete’s name, likeness, and brand—is often licensed through a dedicated company and can be taxed differently from playing or performance income. Both HMRC and the IRS examine whether the split between image and performance income is commercially realistic. Overstated image rights payments can be challenged, so valuations, contracts, and the location of the rights company must be defensible.

Yes. US citizens and Green Card holders are taxed on worldwide income wherever they live, so a US athlete based in the UK must still file US federal returns and may need to report foreign bank accounts under FBAR and FATCA. UK tax paid can generally be credited against US tax, but the filing and disclosure obligations continue for as long as US status is held.

Career earnings are often concentrated into a short window, so planning for life after sport is central. This can involve pension contributions, tax-efficient investment, managing a change of tax residence, and structuring deferred or post-career income such as media and coaching work. Because a move between the US and UK changes which country taxes your assets, transition planning should start well before the final season.