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The Loop

Sergio Garcia's stand against taxes

April 27, 2010

Sergio Garcia apparently won't play in the European Tour's premier event, the BMW PGA Championship next month, as a result of what he decries as a prohibitive tax levied by the HM Revenue & Customs in Britain. Garcia is believed to be the only player to forgo the event as a result of the tax, according to Derek Lawrenson of the Daily Mail.

The HMRC has raised the top tax rate to 50 percent for income earners, including foreign athletes earning money in Britain. Moreover, it taxes a proportion of their endorsement income. Garcia, who will play in the British Open, has said he'd be paying more in taxes than he could make up in earnings.

The European Tour's chief executive George O'Grady told Lawrenson this: "Let's just say we've had our tax specialists look at Sergio's case and I don't understand why he can't play. Does he think he shouldn't pay any tax at all?"

But that doesn't necessarily square with what Jonathan Orr, the finance director of the European Tour, told the Times in January: "These tax rules are discouraging leading golfers, indeed all leading sportsmen and women, from competing in Britain. Our aim is to attract the best players to provide the best entertainment for our audiences in the UK, and I strongly believe that this tax rule is seriously hampering these efforts."

There is this, too, from that Times story: "Julian Hedley of RSM Tenon Media, who represents many top sportsmen, said another leading golfer had paid nearly six times more to HMRC in tax than he earned for participating in two UK tournaments last year -- effectively paying a tax rate of 570%."

-- John Strege