Thank God – IPL is not in UK
Yesterday, in DDT, we mentioned about the Service Tax liability on IPL matches played outside India.
Suppose the matches were to be held in England:-
As per Section 966 of the Income Tax Act 2007, tax is to be deducted at source when a sportsman or sportswoman who is non-UK resident for a tax year performs a relevant activity in the United Kingdom in the tax year.
Now this is not all that simple.
If a sportsman plays in England for six weeks of the IPL , the English taxman can ask for tax to be paid on 6/52 or about 11% of their other annual earnings and endorsements. In addition, as the IPL is prestigious and would increase a sportsman's value, the taxman can argue that more than 11% of their total income can be pursued because their endorsements are increased by playing in the IPL. Whoever wins the IPL, it would have been a win-win match for Her Majesty's Tax Administration.