Pearse Kenney – Senior Tax Manager with HC Financial Advisers Ltd
Sport is never too far from the collective Irish consciousness, but it is at this time of the year when it seems all the more pervasive. The conclusion of the All-Ireland series in both codes dovetails neatly with, amongst others, the start of the English Football Premiership and Rugby Season, swelling the column inches with tales of hope and expectation, victory and loss, joy and despair.While the everyday punter may view sport idealistically, at worse a distraction and at best a source of great pleasure, it can be a serious business, faced with the same commercial realities as any other business. Success or failure means jobs and not just for those on the pitch but for the support staff and those in administration.
There is also the wider economic boon that comes with sporting success. Victory on the field of play enhances national confidence, stimulates consumer spending and contributes to the overall economic well-being. Indeed, of all the politicians, business people and public servants who in various guises have laid claim to the Celtic Tiger, there are those who say that particular phenomenon started the day Ray Houghton headed the ball into the English net in Stuttgart, 1988.
Successive Irish Governments have recognised the important role that sport plays in Irish society and, while it is by no means unique when it comes to that, the tax relief for certain sportspersons on retirement introduced back in the early 1990s was an innovative move in helping to safeguard the sporting landscape in Ireland.
That tax relief, which takes the form of a refund of a portion of the tax paid in Ireland by the retiring sportsperson throughout his or her professional career, was introduced ostensibly in recognition of the contribution that sportspersons make to society and their relatively short careers. However, an eye was also on the retention of the best athletes and sportspersons in Ireland rather than having them ply their trade overseas where more attractive options may have presented.
And it has proved a success in achieving this and with a relatively minor cost to the exchequer when it comes to the refunds which have been handed out. In fact, it is arguable that, rather than being a cost to the exchequer, there has been a net gain when one considers the tax take resulting from gate receipts and the other positive knock-on effects that comes from having the cream of professional sports men and women remain in Ireland.
One drawback to the relief is that it is exclusively for professional sports persons as the tax refund is with reference to taxable earnings from their sporting endeavours. But what about our amateur inter-county hurlers and footballers? What has the tax code to offer them in reward for their excellence? The answer is nothing.
Hurling and football at the highest level is professional in all but name, with the commitment the players put in being on a par with their professional counterparts. Very often this is to the detriment of their careers outside sport with a consequent loss of earnings. Not to mention the impact on their personal lives.
Furthermore, as can be seen from the numbers that flock to games all over the country, their efforts on the pitch contributes richly to the economy, which includes contributions to the exchequer coffers. Once more, this is on a par with any of the other sports in which the tax relief is currently offered. Therefore, a tax break would not be a sop to the players, rather it would have a basis in reality.
It is true that the players are not motivated by money but that should not stop the Government from introducing a tax break in recognition of the contribution they make, especially as this principal has already been established within the tax code.
What form a tax relief for the players would take, the qualification criteria and how the relief would be administered would have to be decided but once the principle to extend a tax relief to the players is agreed the mechanics could then be worked out.
Isn’t it time to level the playing field?
HC Financial Advisers…………….we advise
The story goes (and allowing for the possibility that the story is apocryphal) that at some time in the 1980s a former Welsh Rugby international was a guest on an edition of RTE Radio’s Sunday Sport covering an All-Ireland Hurling Championship game. When asked by the presenter at half time what he made of the game so far, the man from the valleys after witnessing a particularly ferocious half of hurling was moved to reply “Well I tell you one thing, I wouldn’t go out there without a stick.” The Welsh rugby player of today might add “And I’d probably want a few quid too!”