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British Open 2023: The shockingly expensive tax bill for players competing at Royal Liverpool

July 17, 2023
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PAUL ELLIS

No, the winner of this week's Open Championship and its $3 million first-place prize money payout won't be a hardship case who will have to hitchhike home. However, competing in a U.K. tournament as an American-based player can be shockingly expensive—and not just because of the cost of flying private across the Atlantic.

The United Kingdom has some of the most aggressive tax laws in the world—so aggressive that for years many athletes have relocated from there to tax havens like Monaco or the Bahamas, or have refused to play in non-major events because it just doesn't make financial sense.

Unlike virtually every other taxing authority, the U.K. goes beyond taking a chunk of prize money as income tax and hits athletes for a representative percentage of their overall endorsement money for the days they compete on U.K. soil. For example, take Rickie Fowler's experience at the Scottish Open last week. He earned $36,255 for finishing T-42. If he makes, say, $5 million in annual endorsement money from Cobra and Puma, that works out to be about $13,700 per day. For two practice rounds and four days of tournament play, that comes to roughly $82,200, so Fowler's tax liability would be based on $118,455 ($36,255 in prize money plus $82,200 in prorated endorsement earnings) before expenses. That equates to about $36,000 in tax liability, and Fowler was still on the hook for travel, lodging, caddie expenses and champagne and strawberries at Wimbledon. The week was almost certainly a net loss for him.

How will Sunday's Open champion fare? Twenty percent of the $3 million first-place check will be withheld for U.K. taxes right off the top, which leaves $2,400,000. Let’s say Rory McIlroy goes back-to-back after winning the Scottish. The chunk of his $44 million off-course earnings he gets for sponsorship and endorsement—think Nike and TaylorMade—are subject to tax for the number of days he was in the U.K., too. That could work out to be more than $100,000 per day in income the U.K. considers when tabulating the bill. Given the way the U.K.'s tax brackets work, McIlroy could expect to pocket about 40 percent of the $3 million, or $1.2 million, before expenses are taken into account. A nice payday, to be sure, but that's a big check to write to HM Revenue & Customs.

Is it the British Open or the Open Championship? The name of the final men’s major of the golf season is a subject of continued discussion. The event’s official name, as explained in this op-ed by former R&A chairman Ian Pattinson, is the Open Championship. But since many United States golf fans continue to refer to it as the British Open, and search news around the event accordingly, Golf Digest continues to utilize both names in its coverage.

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