Re: Re:
You appear to have over simplified the cost, which would be significant. The people on the low level of grant would still have to pay NI, even if they just escape income tax. The majority would lose anything between approximately 30-50% of their grant income on NI and income tax, depending on whether they have additional income from other sources. (Not a tax expert so unsure whether any of the other benefits would also become taxable e.g. private medical cover). Unless the athletes are expected to accept this substantial hit, which would lead to some calling it a day, the increased cost to the Federations would be significant, particularly when added to the cost of providing pension contributions and paying employer NI.
Wiggo's Package said:Big_Blue_Dave said:Couple of things to add here. Firstly, not all staff members at BC (and certainly a large number outside the WCPP) or other sporting organisations earn more than the non-taxable grant that athletes receive. Of course, there are different levels of grant depending on your expected medal prospects, so some athletes are granted more than others. These athletes also do not have to pay for coaching, travel, medical/physio bills and in some cases smaller things like free phone contracts as these are all covered by the sports governing body mostly via funding from UK Sport and partly from income generated by the sporting body.
If Jess does go onto win this case, Olympic sport funding in the UK will likely cease to exist and it would also likely see the end of what we see now, whereby the athletes do not have to pay for the coaching and access to the training ground/velodrome/courts. This would reduce sport in the UK back to an amateur level similar to what was happening prior to the National Lottery as UK Sport would likely just decide to end funding except for travel costs to the Olympics at the detriment to the performance of the athletes. This would mean these athletes needing to self fund their sporting endeavours via work leaving less time for training and recovery which they do not have to do at this moment.
It could easily be said that the phrase cutting off your nose to spite your face would very much come to mind over this case.
Personally, I don't see athletes as employees in the UK. The State provides funding to allow the individual to perform at the best of their ability on a tax free basis, and then allows the individual to earn an income through prize money and other personal sponsorship deals which is then taxed on. It would be interesting to see how well the performances and therefore the sponsorship levels will hold out if all of what is received now is stopped.
If Team GB's athletes are deemed to be employees as a result of the Varnish case Olympic funding won't drop off a cliff - it will just have to be structured differently
The grant money that currently goes direct to the athletes, etc would have to go to the governing bodies instead who would then pay them salaries
An important consequence would be that income tax and national insurance would have to be paid on those salaries (roughly 20% on top) and the question would be how that additional cost is funded - more money from the Lottery/central government? Reduction in take home pay for athletes? Less athletes on the Olympic programme? IMO the last option is most likely to happen
But a 20% increase in salary costs is not such a big deal in the wider context of all the other areas where money is spent. And all those other costs (permanently employed governing body managers/coaches, equipment, travel, rent for premises, medical bills, etc) would be unchanged
UK Sport's Olympic funding model (not just the no employment rights for athletes thing but also the whole win medals or lose funding thing) has led to unethical practices and unsavoury behaviour becoming the norm in many Olympic sports - the scandals just keep coming
Time to clean house - and if Team GB wins a few less Olympic medals a a result then personally I would have no problem with that
You appear to have over simplified the cost, which would be significant. The people on the low level of grant would still have to pay NI, even if they just escape income tax. The majority would lose anything between approximately 30-50% of their grant income on NI and income tax, depending on whether they have additional income from other sources. (Not a tax expert so unsure whether any of the other benefits would also become taxable e.g. private medical cover). Unless the athletes are expected to accept this substantial hit, which would lead to some calling it a day, the increased cost to the Federations would be significant, particularly when added to the cost of providing pension contributions and paying employer NI.