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Tax needn't be taxing
Posted: 16 Mar 2009, 11:53
by My T Sharp
Sorry about this, but the tax year end is coming :P
Could anyone in the know tell me if the 'average' boxer pays income tax on their purses?
I was reading up on the tax rules for 'athletes' which appears to cover boxers, and it falls into two camps.
Either, athletes in it for business or hobby. Obviously the full-time big earners are business, but I would have thought the pro who still has a full-time job but trains a few nights a week and only has a few fights a year, would be a hobby and therefore would not be taxed on their fighting income?
Would appreciate it if anyone could help
Re: Tax needn't be taxing
Posted: 16 Mar 2009, 11:56
by Counter-puncher
i'd be very surprised if fighters with a day job didn't get taxed on boxing income
take people who do part-time standup as one example, they get taxed on any extra they earn on top of their regular job. it may only be their hobby but if they're earning from it the Taxman will want his cut
Re: Tax needn't be taxing
Posted: 16 Mar 2009, 12:03
by My T Sharp
Counter-puncher wrote:i'd be very surprised if fighters with a day job didn't get taxed on boxing income
take people who do part-time standup as one example, they get taxed on any extra they earn on top of their regular job. it may only be their hobby but if they're earning from it the Taxman will want his cut
That's what I thought but the only HMRC examples in this area are footballers & rugby players who are employed and then as a seperate category athletes.
Obviously athletes are not known as professionals like boxers, but there are several boxers who's motivation is not business. However if they were taxed, I would have thought that once all the expenses come off there would not be much tax to pay for the casual fighter.
Re: Tax needn't be taxing
Posted: 16 Mar 2009, 12:06
by Counter-puncher
My T Sharp wrote: However if they were taxed, I would have thought that once all the expenses come off there would not be much tax to pay for the casual fighter.
that sounds right. PM me if you want to know about filling in a tax return, what you can claim, and so on
Re: Tax needn't be taxing
Posted: 16 Mar 2009, 12:44
by EddieShredder
MMA Fighter Ian Freeman narrowly avoided jail this month for not paying taxes on his purses over a few years.
Re: Tax needn't be taxing
Posted: 16 Mar 2009, 12:48
by twenty six
Of course tax has to be paid
So does 4% board tax.
Re: Tax needn't be taxing
Posted: 16 Mar 2009, 13:13
by Coco
As a boxer you are self employed, and have to fill in your return at the end of the tax year. The tax is not taken at source but obviously you can deduct your expenses, inc training expenses, travel, kit, medicals etc.
A lot of lower level fighters are paid in cash and not everyone declares it, but that is the risk you take.
I know Eubank didn't really look after his tax affairs which left him in a load of debt, but obviouslt the tax man doesn't chase everyone
Re: Tax needn't be taxing
Posted: 16 Mar 2009, 13:28
by Poncey
twenty six wrote:Of course tax has to be paid
So does 4% board tax.
How does it work? Do they pay themselves dividends through their company or PAYE?
Re: Tax needn't be taxing
Posted: 16 Mar 2009, 13:37
by My T Sharp
twenty six wrote:Of course tax has to be paid
That's what I was disputing based on the legislation.
The following guidance deals specifically with athletes. However, when dealing with other sportsmen the guidance may help Inspectors considering whether:
* there is a trade, profession or vocation as opposed to a purely leisure pursuit or hobby
That an athlete is described as an amateur is not decisive in considering whether he should be assessed under part 2 of ITTOIA. The leading figures in athletics are likely to be assessable on their earnings as persons carrying on a trade, profession or vocation.
But the activities of most athletes remain a purely leisure pursuit or hobby, even though payments may occasionally received
The distinction between a hobby on the one hand and a trade, profession or vocation on the other is very much a question of fact and degree; amateur status is not decisive.
So I would say a boxer fighting once or twice a year for not much money would be a hobby :??
Cheers for the responses
Re: Tax needn't be taxing
Posted: 16 Mar 2009, 14:21
by gkt999
I know we give all boxers on our shows reciepts and it states on them (which they sign 2 copies of) that they are responsible for all Tax NI etc.
A mate who is a Pro boxer does put 20% of all his purse fee's after training fees etc away for the tax man. Never seems to take all of it though once he has claimed back expenses for gloves ringwear etc.
Re: Tax needn't be taxing
Posted: 16 Mar 2009, 15:35
by My T Sharp
Emerson Poncey Name Ghent wrote:twenty six wrote:Of course tax has to be paid
So does 4% board tax.
How does it work? Do they pay themselves dividends through their company or PAYE?
Self employed via Self Assessment like Coco said.
It's worth looking at incorporation if annual earnings are likely to be £13k upwards. Obviously the big name boxers incorporate to avoid paying higher rate tax.
Re: Tax needn't be taxing
Posted: 16 Mar 2009, 15:41
by DG.
My T Sharp wrote:Sorry about this, but the tax year end is coming :P
Could anyone in the know tell me if the 'average' boxer pays income tax on their purses?
I was reading up on the tax rules for 'athletes' which appears to cover boxers, and it falls into two camps.
Either, athletes in it for business or hobby. Obviously the full-time big earners are business, but I would have thought the pro who still has a full-time job but trains a few nights a week and only has a few fights a year, would be a hobby and therefore would not be taxed on their fighting income?
Would appreciate it if anyone could help
They will be taxed. You get a personal Tax allowance of £6K ad anything ovet that amount is taxed!
