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.

Latest stories from i100
Have you tried new the Independent Digital Edition apps?

Day In a Page

Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain
Ebola epidemic: Plagued by fear

Ebola epidemic: Plagued by fear

How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

From 'Parks and Recreation' to 'Guardians of the Galaxy'

He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star
How live cinema screenings can boost arts audiences

How live cinema screenings can boost arts audiences

Broadcasting plays and exhibitions to cinemas is a sure-fire box office smash
Shipping container hotels: Pop-up hotels filling a niche

Pop-up hotels filling a niche

Spending the night in a shipping container doesn't sound appealing, but these mobile crash pads are popping up at the summer's biggest events
Native American headdresses are not fashion accessories

Feather dust-up

A Canadian festival has banned Native American headwear. Haven't we been here before?
Boris Johnson's war on diesel

Boris Johnson's war on diesel

11m cars here run on diesel. It's seen as a greener alternative to unleaded petrol. So why is London's mayor on a crusade against the black pump?
5 best waterproof cameras

Splash and flash: 5 best waterproof cameras

Don't let water stop you taking snaps with one of these machines that will take you from the sand to meters deep
Louis van Gaal interview: Manchester United manager discusses tactics and rebuilding after the David Moyes era

Louis van Gaal interview

Manchester United manager discusses tactics and rebuilding after the David Moyes era
Will Gore: The goodwill shown by fans towards Alastair Cook will evaporate rapidly if India win the series

Will Gore: Outside Edge

The goodwill shown by fans towards Alastair Cook will evaporate rapidly if India win the series
The children were playing in the street with toy guns. The air strikes were tragically real

The air strikes were tragically real

The children were playing in the street with toy guns
Boozy, ignorant, intolerant, but very polite – The British, as others see us

Britain as others see us

Boozy, ignorant, intolerant, but very polite
How did our legends really begin?

How did our legends really begin?

Applying the theory of evolution to the world's many mythologies
Watch out: Lambrusco is back on the menu

Lambrusco is back on the menu

Naff Seventies corner-shop staple is this year's Aperol Spritz