Draft Major Sporting Events (Income Tax Exemption) Regulations 2017

Jeff Smith Excerpts

Monday 24th April 2017 General Committees

[Jeff Smith (Manchester, Withington) (Lab)]

It is a great pleasure to serve under your chairmanship, Mr Gray. As the Minister has explained, the regulations provide for an exemption from income tax on income earned in the UK in connection with the Champions League final this year.

The idea of exempting earnings from major sporting events from income tax for non-UK residents is not new; indeed, it goes back to 2006 and 2010, when the Labour Government introduced certain special provisions to exempt non-residents who are coming to the UK to take part in sporting events—in particular, the 2012 Olympics and the 2011 Champions League final. Exemptions of that kind have historically been made through primary legislation, in Finance Bills, but the Government announced in the 2014 Budget that they would legislate to enable income and corporation tax relief to be given in relation to major sporting events via secondary legislation. Provision to that effect was made in section 48 of the Finance Act 2014, and these draft regulations are the first set of exemptions made by virtue of the powers granted in that Act.

Labour obviously join the Government in being delighted that the Football Association of Wales was awarded the right to host the Champions League final at the National Stadium of Wales. The Minister will be aware that the Opposition broadly support the principle of providing tax exemptions for certain sporting events, so we will not oppose the regulations today, but I have a couple of questions.

We continue to express concern about the uncertainty regarding the Government’s approach to selecting such events and seek assurances regarding the prevention of tax avoidance. During the passage of the Finance Act 2014, we moved an amendment to require the publication of a formal review of those decisions every five years. In particular, we questioned what other sporting events the Government envisaged becoming eligible for tax exemptions for non-resident competitors and whether the Government planned to extend the number and range of eligible events. We continue to seek clarity in that regard.

The Minister will also be aware that we have previously raised concerns about gender equality issues, including that the UEFA women’s Champions League final, held at Stamford Bridge in London on 23 May 2013, was not given the same tax exemption as the 2013 men’s Champions League final held at Wembley. Will the Minister confirm that women’s events are being treated equally and, in particular, clarify whether the regulations apply to the 2017 UEFA women’s Champions League final, which is also to be played at the National Stadium of Wales, on 1 June, two days before the men’s final? Will she also confirm what equality impact assessment analysis has been carried out? As I said, we will not oppose the regulations, but we will be grateful for clarity on those issues.

Finally, I join the Minister in looking forward to a fantastic event for Cardiff and in wishing the four teams left in the Champions League the best. If I am allowed to express a preference, I particularly wish Monaco the best; they were fantastic when they played my team, Manchester City, in the last 16. I would like to see them go on and win it, but I wish the best of luck to all the teams and to Cardiff in hosting this great event.

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[Jane Ellison]

If I am unable to answer colleagues’ questions today, I will obviously get in touch with them after the debate to clarify. The criteria for granting tax exemptions has been set out on a number of occasions, but I am happy to repeat them. They are that the events should be world class and internationally mobile and where a tax exemption by the host country is a requirement of a bid to host the event. For those who are concerned, it is worth noting that the cost of these exemptions to the Exchequer is negligible and in any case is likely to be offset by the benefits of hosting such high-profile events—something that I am sure comes into the minds of those bidding to host them.

The Opposition Front-Bench spokesman raised gender equality. It is certainly not the case that the Government give tax emptions only for all-male events. If the organisers of an all-female event approached the Government, basically the same policy criteria would apply when deciding whether a tax emption was appropriate. The majority of events that have been granted exemptions, such as the Olympics and the forthcoming world athletics championships, actually feature male and female competitors. With regard to the specific event that he named, I understand that an exemption was not requested. However, the criteria would have been applied equally. I accept that, in the world of sport, the decision might sometimes come out differently depending on the nature of the event, but it is dictated not by the gender of the participants in the sport but by nature of the occasion.

[Jeff Smith]

When the Minister says the exemption was not requested, was that for the 2017 women’s Champions League final?

[Jane Ellison]

I believe that is the case, yes. We do all the normal assessments with regard to impact. As I said, the policy is effectively gender-neutral in that regard, because the criteria are linked not to gender but to other things.

I will look for inspiration with regard to the more technical question I was asked, but if I cannot find any, I might have to drop the hon. Member for Paisley and Renfrewshire North a line to clarify the need for a legislative consent motion. If it is all right, Mr Gray, I will come back to him subsequent to the debate.