Agassi wins tax battle round two

The tennis superstar Andre Agassi won the second set of his legal battle with the UK taxman today in a stunning victory which could cost the Revenue half a billion pounds.

Three appeal judges in London allowed Agassi's challenge to a High Court ruling that foreign showbiz and sports stars on tour in Britain are liable for UK income tax on money earned from overseas product endorsement deals - even if the cash never sees the light of day in this country.

The Court of Appeal ruled that Agassi was not liable to UK tax on income paid by German sportswear makers Nike and Head Sports to his US-based company, Agassi Enterprises Inc, because none of them was resident or had a "tax presence" in Britain.

Inland Revenue lawyers are to petition the House of Lords for leave to appeal.

Agassi's legal team estimated that the Revenue could be faced with having to repay up to half a billion pounds to the multitude of entertainers and sports stars who have toured in Britain since the law at the centre of the case - 1988 Income and Corporation Taxes Act - came into force.

The Revenue would also lose out on tens of millions in the future unless the Law Lords reversed today's decision or Parliament amended the Act.

The 1988 Act contains special provisions regarding foreign entertainers and sports stars who might have only a fleeting physical presence, and no tax presence at all, in this country.

Agassi's appeal was based on his tax liability for the year 1998-99, which the Revenue had assessed at £27,500. He has not yet paid the money because the case is still under revue by the courts.

In the High Court, Mr Justice Lightman said it would be "absurd" to construe the Act so as to allow tax to be avoided by the simple expedient of channelling payments through a foreign company with no presence in the UK.

"If this were the case, the tax would effectively become voluntary," he said.

But Lord Justice Buxton, sitting with Lords Justices Sedley and Jacob, said today that tax was only chargeable on payments made directly to the entertainer or sportsman or made to an associated company by a person with a UK tax presence.

In this case, the money was paid, not to Agassi, but to Agassi Enterprises - a separate legal entity - by two German companies with no UK tax presence.

It might well be that Parliament, if it reviewed the statute, would extend its scope, the judge said.

But as the Act stood, the situation was not "absurd or an invitation to tax evasion" and came nowhere near to providing grounds for disapplying the general principle that UK statutes had no effect in foreign countries.

News
Emma Watson has become the latest target of the 4Chan nude hacking scandal
peopleThreats follows actress' speech on feminism and equality at the UN
Life and Style
food + drink
Arts and Entertainment
British actor Idris Elba is also a DJ and rapper who played Ibiza last summer
film
Life and Style
tech
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
tech
Life and Style
Alan Turing, who was convicted of gross indecency in 1952, was granted a royal pardon last year
life
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
News
i100
Life and Style
life
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

Day In a Page

Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits