Taxation of income from sporting testimonials and benefit matches

16 December 2015

As announced at Autumn Statement, legislation will be introduced in Finance Bill 2016 to confirm that income from sporting testimonials and benefit matches for employed sportspersons, irrespective of whether they are arranged by the sportsperson’s club or by an independent testimonial committee, is chargeable to income tax under PAYE. This will apply where the testimonial is granted or awarded on 25 November 2015 or later, and only to ‘events’ that take place after 5 April 2017.

An exemption will be available under the new legislation for the employed sportsperson of up to £50,000 of the income received, either from an individual match or a series of events in a testimonial year. The exemption is available provided that there is no contractual entitlement or customary right to the sporting testimonial or benefit match, and that it is being arranged by an independent testimonial committee. Separate legislation will also be introduced before 6 April 2017 for the National Insurance treatment of testimonial income for employed sportspersons which will follow the income tax treatment.

This follows the announcement at Summer Budget 2015 and public consultation over the summer. A summary of responses to the consultation was published on 9 December 2015.

The closing date for comments on the draft legislation is Wednesday 3 February 2016.