A UK tax on earnings of foreign entertainers and sports stars, such as Spanish tennis player Rafael Nadal, has generated £68 million (around $105 million) in the 2009-2010 financial year, Bloomberg reported, at a time when the UK government has been mulling whether to slash a top income tax rate.

The news service, which said it had used a Freedom of Information Act request, said that the Foreign Entertainers Unit of HM Revenue & Customs collected the money from the tax on endorsement income, appearance fees and revenue in 2008-2009.

A month ago, Nadal reportedly said he will not prepare for the annual Wimbledon tennis tournament, playing instead in Germany, arguing that he would lose money by coming to the UK for that time.

The issue is not just about foreign sportsmen and women avoiding playing in the UK. A number of UK sports figures live abroad for tax reasons. For example, the UK-born Formula 1 racing driver, Lewis Hamilton, lives in Switzerland; a number of other drivers from the UK, such as Jensen Button and Nigel Mansell, for example, have lived overseas in part for tax reasons.

The UK has pushed in different directions in the treatment of wealthy foreign-born individuals in recent years. The previous Labour government (1997-2010) introduced a top income tax rate of 50 per cent and imposed an annual levy on non-domiciled residents. The current Conservative/Liberal Democrat government has clarified rules on defining residency and domicile, and has also created a new “investment visa” to encourage wealthy investors to put money into the UK. Finance minister George Osborne is considering scrapping the 50 per cent tax rate.

The possibility that foreign sports stars and entertainers may leave the UK or visit the country less frequently is significant for wealth managers, which have in some cases created specialist segments to deal with such clients, as in the case of Coutts, for example.

The Bloomberg report said that Jamaican record-breaking sprinter Usain Bolt last year avoided competing in London because of UK tax laws, while Spanish golfer Sergio Garcia limits his appearances to the British Open for the same reason. Team sports such as soccer are exempt, it said.