British stars face hefty tax bills for their time at Wimbledon

Despite her third-round exit, the 22-year-old will still take home £152,000 in prize money from the tournament.  However, unfortunately for Emma, she could face a hefty tax bill, which will see almost half of her prize money taken away.

Assuming Emma is an additional rate taxpayer with other income exceeding £125,140, the applicable tax rate on the prize money will be 45 per cent. This will lead to a UK tax liability of £68,400.  If Emma is classed as a UK resident for tax purposes, she is also likely to have Class 4 National Insurance to pay at two per cent on this income, resulting in a National Insurance liability of £3,040. Therefore, her take-home pay after tax and NIC would be £80,560.

Meanwhile, hopes of a British winner at Wimbledon were dashed on Wednesday when Cam Norrie was defeated by Carlos Alcaraz in the men’s quarterfinals. For reaching the quarters, Norrie earned £400,000 in prize money, but like Raducanu, he too faces a substantial tax burden. Assuming he is also an additional rate taxpayer, his combined tax and National Insurance liability would total £183,600, leaving him with £216,400 to take home.

These figures represent the liabilities before considering any deductible expenses, such as travel and accommodation costs and coaching fees. These expenses can be deducted from the taxable amount and will therefore reduce their final tax bill.

Advice for professional sports professionals

As international competitors, both Raducanu and Norrie must also consider their global tax responsibilities. Professional athletes often face complex tax scenarios due to their international travel and earnings.

Sports professionals and their advisers must take a proactive approach to their tax affairs. This includes:

• reviewing tax residence annually, especially if travel patterns or personal circumstances change;
• considering the tax rules in each country, they plan to compete before they arrive;
• keeping comprehensive records of travel dates, contracts, prize money and fees; and
• coordinating local tax filings in each country where they compete to ensure compliance.

This highlights the importance of careful tax planning and seeking professional advice to navigate complex tax rules, manage tax liabilities and also to ensure all filing obligations are met accurately and on time.