Jannik Sinner and Iga Swiatek, recent Wimbledon champions, will incur tax bills over £1 million each on their UK earnings despite not being UK tax residents. Their £3 million prize money is taxable under HMRC rules, which applies a withholding tax of 20%. Ultimately, they face a 45% tax rate on their winnings after allowable business deductions. Additionally, income from their image rights may also be taxed in the UK. The UK tax regime disincentivizes some international athletes from participating in events despite the prestige of Wimbledon.
Wimbledon will be obliged to operate withholding tax, at a flat rate of 20%, on the prize money that they pay to these stars. However, Jannik Sinner and Iga Swiatek will ultimately be taxed in the UK at the top rate of 45% on their winnings-less any allowable business expenses they can deduct.
Many countries-including Germany-offer far more generous tax treatment to travelling athletes. The UK's relatively punitive regime has previously deterred stars like Usain Bolt and Rafael Nadal from participating in certain UK events, due to the financial impact.
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