Expenses Guidance

Self-employed athletes are able to deduct a range of expenses from their business income in calculating their profits for tax purposes. This guidance note provides examples of expenditure that may qualify for relief.

The general rule is that, for expenses to be tax-deductible they must be incurred wholly and exclusively for the purposes of the athlete’s profession.

Where an expense is incurred for more than one purpose and an identifiable part or proportion is incurred wholly and exclusively for the purpose of the athlete’s profession that part or proportion is tax deductible.

The following are examples of expenses that may be deductible in whole or in part. It must be noted however that whether an expense, or a part or proportion of it, is allowable in computing profits is down to the facts and circumstances in each individual case:

• Accounting fees
• Agent’s and manager’s fees and commissions
• Capital allowances on/cost of equipment.
• Cost and upkeep of professional clothing.
• Insurance of equipment used for training for events and competitions
• Telephone and Internet costs.
• Legal fees.
• Overdraft interest.
• Postage and stationery
• Professional subscriptions and journals
• Public indemnity insurance
• Publicity costs
• Research assistance and material.
• Secretarial assistance.
• Sports coaching, including hire of facilities, for training for events and competitions
• Sundry/other costs incurred for the sole purpose of earning profits
• Taxi between accommodation and competition/training venues.
• Travel from normal base to events and competitions including related subsistence
• Use of home – a part/proportion of the household expenses related to your profession.
• Use of vehicle (Mileage costs).
• Visits to sports events if wholly for the purpose of the profession

Medical expenses, including physiotherapy regardless of whether the injury is ‘professional’ and the cost of dietary and nutritional supplements are generally not allowable, on the basis that there is a dual purpose- the profession and the better health of the athlete.

It is essential to keep records to support the figures in the profit computation, or profit and loss account for the profession. A record of all income must be kept including copies of any invoices the athlete has issued. Supporting evidence must be kept to substantiate the expenditure claimed in the profit and loss account including copies of invoices/receipts for purchases and expenses.

Professional and personal records should be kept separate and where expenditure relates to both personal and professional matters sufficient records must be kept to show what expenditure relates to the former and what to the latter.

Athletes with substantial levels of income and numbers of sponsors may need to have a separate bank account for their professional activities and will certainly need more detailed records. For those earning at the lower levels it may be sufficient to keep a detailed diary record supported by vouchers/invoices/receipts. If records are not kept throughout the year it may be too late to reconstruct them after the year has ended and in any event such records will have less authority not being contemporaneous.

If you have any questions regarding the above, please call us:
01473 229800