Some of international rugby's biggest stars look set to be slapped with a 50% tax bill when they turn out to play in the UK-hosted 2015 World Cup.
The news emerged shortly after Chancellor George Osborne announced in Budget 2013 that athletes such as Usain Bolt would be exempt from paying income tax at the 2014 Commonwealth Games in Glasgow. The same tax waiver will also be applied to the athletics meet in August, which is being held to celebrate the first anniversary of the London 2012 Olympics.
UEFA has a long-standing agreement that players at the Champions League final will be exempt from UK tax.
But it is understood that the Dublin-based International Rugby Board (IRB) did not put in a request to the Department of Culture, Media and Sport (DCMS) for overseas players to receive a tax exemption during the tournament which takes place in September and October 2015.
The IRB told Accountancy: 'Rugby World Cup Limited and Unions are satisfied with the processes that are in place. All aspects of tournament preparation are on track to deliver an outstanding Rugby World Cup 2015 for fans, teams, the nation and the global rugby community.'
HMRC currently taxes the earnings of overseas athletes from appearance fees and prize money at 50%. It also taxes them on a proportion of their global endorsement income.
An HMRC spokesman said: 'The government only provides income tax exemptions for visiting non-resident sportspeople where it is a condition of the bidding process for hosting an internationally mobile event at the top level of world sport or, on an exceptional basis, where such an exemption would help prolong the legacy of the London 2012 Olympic and Paralympic Games.'
The number of days a foreign athlete spends training and competing in the UK a year is divided by the total number of days the athlete trains and competes around the world. HMRC uses the figure to calculate the percentage of global income that is taxable.
The DCMS would not be drawn on the situation.
An industry source said that the Rugby World Cup was 'different to a diamond league athletics event in the sense that there are no payments of appearance fees or win bonuses to the players by the tournament'. He added that there was 'less impact as they are salaried players contracted through their participating rugby unions'.
The Rugby Football Union expects the tournament to generate around £2.1bn for the UK economy and around £300m for the IRB.
In addition to the £80m tournament fee, a further £220m from broadcasting, sponsorship and merchandising deals is expected to be generated from the event.