Colin Breed (Shadow Minister, Treasury; South East Cornwall, Liberal Democrat)

In the explanatory notes on the background to the clause, paragraph 9 states that

“athletes not resident in the UK will not pay income tax on any income arising from their performance at the Games”.

Does that include sponsorship, advertising, media appearances—in fact, all the income that is sometimes somewhat more than that arising from their performance in the games? Sometimes income is more to do with their performance in television adverts and such like.

John Healey (Financial Secretary, HM Treasury; Wentworth, Labour)

I can broadly confirm the supposition that the hon. Member for South-East Cornwall (Mr. Breed) makes. The current tax system for non-UK resident performers includes income earned in the UK from a range of activities. In the case of a sports star, for example, it may include the winnings in a tournament and media earnings from associated appearances. The provision is designed for the specific purpose of making a special time-limited exemption on such earnings for individual competitors, performers and support staff directly related to the delivery of the Olympics. That is the basis of the proposal, and I stress its time-limited nature.

Colin Breed (Shadow Minister, Treasury; South East Cornwall, Liberal Democrat)

Will the Financial Secretary explain the time limit? Is it the three weeks in which the Olympic games take place, or is it a longer period, including that prior to the games when performers are training in this country?

John Healey (Financial Secretary, HM Treasury; Wentworth, Labour)

No, it will be a longer period than that. The IOC suggested in the host-city contract that we consider a period of 120 days leading up to the opening ceremony, and an additional 60 days after the closing ceremony. We will work through the detail. The clause contains the power to make such requirements in regulation, which is obviously more appropriate than making them in the Bill. Nevertheless, that is the period we are considering: several weeks around the Olympic games and the Paralympic games proper.

Helen Goodman (Bishop Auckland, Labour)

I understand what the Financial Secretary says about what is going on, but he has not explained why we are providing that massive tax exemption.

John Healey (Financial Secretary, HM Treasury; Wentworth, Labour)

Perhaps my hon. Friend the Member for Bishop Auckland (Helen Goodman) missed it, but when we started talking about this group of clauses at the outset, I explained that as an innovation, the IOC required of any bid city its preparedness to make tax arrangements to ensure that the successful city’s delivery of the Olympics was not affected by tax. Therefore, clauses 65 to 67 include a range of organisations—not only the London Organising Committee but the International Olympic Committee—and clause 68 covers the competitors and support staff.

The short answer is that the IOC wanted and required the provision as part of the bid. We gave an undertaking to create it as part of the successful London bid, and clause 68 will honour that undertaking.