Draft Major Sporting Events (Income Tax Exemption) Regulations 2016

David Gauke Excerpts

Monday 11th July 2016 General Committees

[The Financial Secretary to the Treasury (Mr David Gauke)]

I beg to move,

That the Committee has considered the draft Major Sporting Events (Income Tax Exemption) Regulations 2016.

It is a pleasure to serve under your chairmanship, Sir Edward. The draft regulations will provide an income tax exemption for overseas sportspeople competing in the London anniversary games 2016 and the world athletics championships 2017. The exemption will apply only to competitors resident outside the United Kingdom; it will apply to any income that a competitor receives while competing in the events or from activities that they perform to promote or support them.

Both the anniversary games and the world athletics championships are events of the highest international standard and will attract the greatest athletes in the world. Both events will be hosted in the Queen Elizabeth Olympic park in Stratford, the iconic venue of the extraordinarily successful 2012 London Olympic and Paralympic games. Members of the Committee will be aware that it has been the policy of successive Governments to provide an income tax exemption for visiting athletes in such major sporting events. In recent years, tax exemptions have been granted for competitors in a series of high-profile events, so it is entirely appropriate for the Government to provide similar exemptions for these two major international events.

The draft regulations mark an important departure by providing the exemptions through secondary legislation. The power to do so was introduced by the Finance Act 2014 and these regulations mark the first occasion on which that power has been exercised. I emphasise that, although the process for granting tax exemptions has changed, the reason for granting them remains the same. As I have said on previous occasions, the policy criteria for sport tax exemptions fall into two broad categories: first, where such an exemption is a necessary condition of a bid to host an internationally mobile event at the highest level of world sport; and secondly, where the event in question provides an exceptional opportunity to prolong the legacy of the 2012 Olympic and Paralympic games. The 2017 world athletics championships fall squarely within the first category, and the 2016 London anniversary games are entirely consistent with the second. This year’s anniversary games will run from 22 to 23 July and the 2017 world athletics and para-athletics championships will run from 14 July to 13 August.

Similar exemptions were put in place for the London anniversary games in 2013 and 2015. However, as the 2016 Olympics will start in Rio de Janeiro next month and so bring to an end the four-year Olympic cycle, it is appropriate that, as the Government announced in the autumn statement last year, this will be the last year in which the exemption will be granted for the London anniversary games.

The exemptions provided by the draft regulations demonstrate the Government’s continuing commitment to ensuring that the UK is an attractive location for major international sporting events. I commend them to the Committee.

--- Later in debate ---

[Mr Gauke]

I thank the hon. Member for Salford and Eccles for essentially supporting the regulations. She raises several questions, at the heart of quite a lot of which is a point about the criteria that apply to these tax exemptions, so let me set those out briefly. I direct her to the explanatory notes published alongside the 2014 Finance Bill, which state:

“The Government’s policy is to grant certain tax exemptions for sporting events if the event is: world-class, internationally mobile, and where exemption by the host country is a requirement of a bid to host the event. In addition the Government has provided exemptions for events which were or are exceptionally well-placed to extend and preserve the legacy of the London 2012 Olympic and Paralympic Games.”

That is the basis on which decisions are made. Tax exemptions for major sporting events are considered on a case-by-case basis and those criteria are applied. There is certainly no discrimination against women’s sports. There is no gender inequality in the sense that any event that meets the relevant criteria and qualifies for an exemption will get an exemption. I hope that that reassures the hon. Lady.

The hon. Lady also raised the issue of a tax information and impact note. There is in fact such a note for the regulations, which sets out our thinking and assessment of their impact. I hope that that is helpful.

The regulations will help to ensure that we provide certainty and that the two events to which they relate, in which both men and women compete, are successful. I will be grateful if the Committee supports the draft regulations.

Question put and agreed to.