Luke Littler’s rise to fame has earned the darts star a mouthwatering amount of prize money.
Luke Littler to have over £100k prize money taken away but avoids bigger bill – EXCLUSIVE
Darts sensation Luke Littler is poised to lose over £100,000 of his prize money off the back of his Premier League success and run to the World Championship final. The 17-year-old has taken the sporting world by storm and after back-to-back nightly wins in the weekly competition, is continuing to prove that he belongs with the elite players.
The teenager has racked up £310,000 in prize money over the past few months, starting with the World Championship runners-up prize at Alexandra Palace which netted the teen a cool £200,000. Each of his two Premier League wins come with another £10,000, while he bagged another £60,000 combined at the UK Open, Players Championship and Belgian Darts Open.
Littler also won £30,000 at two invitational events, the Bahrain and Dutch Masters, and continues to go from strength to strength. But he is powerless to prevent having a portion taken away through national insurance and tax. Tom Wallace, director of tax investigations at WTT Group and a member of the International Sports Tax Association, has provided further insight into the amount of money Littler is set to lose and how the superstar has avoided further huge payouts.
In contrast to how a lottery winner or a member of the public does not have to pay tax on their income from gambling, courts have explained that ‘Badges of Trade’ ensure that Littler is trading rather than undertaking a hobby and needs to pay taxes.
The Badges of Trade consist of the nature and scale of events a person competes in and the way they are organised, competitions entered in the relevant period, a person’s final position in each event, prizes received, grants or receipts from sporting or other organisations, attendance of performance fees, sponsorship or endorsement fees, income from associated activities including TV appearances, terms of any agreement with an agent negotiating contract with sponsors, the cost and nature of expenses.
A sportsperson such as Littler who is entering into national and international tournaments regularly, that are televised, and offer significant fees and prizes to participants, is very likely to be trading rather than undertaking a hobby,
“Therefore prize money received as a result of their participation will be considered taxable income. This differs from prize money received from lottery and gambling wins, which are not taxable, as there is not the presence of a sufficient degree of organisation, or skill, to indicate a trade is taking place.”