Tiger Woods’ reluctance to accept a Ryder Cup wild card may in part be due to a £1m tax bill he could face for playing in the event, which pays no prize money. Aside from any sporting price his team-mates might face because of his wretched form, the issue highlights a problem that is causing concern for many British sporting events.

The world No 1, who is reportedly going through an expensive divorce, is notoriously careful with his finances, and is no great lover of the biennial match between Europe and the US. But any reticence on his part of having to pay huge sums to represent his country would provoke sympathy among the world of professional sport.

Woods would not be the first athlete kept away by Britain’s new punitive tax rules – the sprinter Usain Bolt has pulled out of a high-profile race in London this weekend. And prospective members of Europe’s Ryder Cup team whose main residence, like Woods, is in the tax haven of Florida could also be hit.

Sportsmen and women who earn money in the UK while not resident have been targeted by HMRC after it won a high-profile case against Andre Agassi four years ago. The implications are now being felt. Previously HM Revenue & Customs had only gone after a portion

of “active income”, earnings from prize money or appearance fees. But the so-called “passive income” – mainly from endorsements – was not deemed liable for UK tax. Now attempts are made to claim tax not just on a foreign sportsperson’s direct earnings on British soil (for example, prize money) but also on a proportion of the sportsperson’s |global endorsement earnings.

The Independent understands that leading players have voiced their concerns to the European Tour, the organisers of the Ryder Cup, and a Tour spokesman last night confirmed that they are in “discussions” with HMRC. HMRC told The Independent yesterday that Woods and the other players would still probably be liable on their equipment sponsorships.

“Product endorsements that are directly connected to the sportsperson’s performances are subject to UK tax,” explained an HMRC spokesperson. “Though full UK expenses arising from the performance can be claimed against the income chargeable to UK tax.”

Woods’ deal with Nike is rumoured to pay $40m a year. So if he played 14 events this year, and one of those is the Ryder Cup, he would be billed to pay tax, at 50 per cent, on one-fourteenth of that amount, leaving the potential tax bill as high as £900,000.

The taxman would no doubt also be interested in the reported $10m he receives from EA Sports, for whom his name and images appear in a computer game based on the Ryder Cup.

Mitchell Platts, the European Tour’s director of public relations corporate affairs, yesterday revealed the anger and frustration in British golf. “These tax rules are discouraging leading sportsmen and sportswomen from competing in Britain,” he said. “Our aim is to attract the best players to provide the best entertainment for our audiences in the UK. This tax rule is seriously hampering our efforts. Discussions continue to take place with the HMRC and these discussions include the Ryder Cup.”

It is safe to assume the last point is the most urgent. With the match at Celtic Manor just two months away, the tour is believed to be trying to persuade the tax authorities that the Ryder Cup – widely regarded to be the third biggest sporting event in the world – deserves to be exempt. Currently only the Olympics and next year’s Champions League final at Wembley have been accorded special status. Fifa also insisted England’s 2018 World Cup bid included a guarantee of an exemption.

For future British bids the Ryder Cup will likely insist on the same. As it is, Celtic Manor won the right to stage the great golfing showpiece five years before HMRC got tough. It is not just a problem for this match, as in four years time the Scottish complex of Gleneagles plays host. If HMRC does issue tax bills this time around, mutiny may be very much in the air by then.

American players have long been sensitive about not being paid at the Ryder Cup and two of Woods’ closest friends, Mark O’Meara and David Duval, have gone on record as saying so. Woods, himself, once famously remarked there were

“a million reasons” why he would rather win a lucrative tournament than the Ryder Cup, and three years ago the rookie Hunter Mahan accused the organisers of treating the players like “slaves” and said it could lead to a boycott.

“The players might say, ‘You know what? We’re not doing this anymore, because this is ridiculous’,” he said. How the Americans will feel now should they actually have to hand over some of their endorsements will be interesting to hear; from Woods, particularly.

Julian Hedley, head of the media division at specialist accountants RSM Tenon highlights the problem across sport: for Rafael Nadal, who might be expected to play three of his 10 tournaments a year in the UK, it would result in an estimated tax bill of £375,000, exclusively from endorsements.

“We represent a number of the world’s top sports stars and are seeing cases where they are effectively paying up to 500 per cent tax on their UK prize money as a result of the taxation of their endorsement income,” says Hedley. “As more and more sports stars are choosing to compete only at major UK events, this will undoubtedly have a negative impact on our culture, economy and our ability to inspire British stars of the future.”

RSM Tenon calculate that the total the Inland Revenue might generate from such taxes is around just £7m. Last year Aegon paid £30m in a sponsorship deal with the Queen’s Club championship. Such sums are contingent on tournaments continuing to attract the top names.

For now, Woods is outside the eight Ryder Cup qualifying positions and with just this USPGA Championship remaining in the US race needs at least a top-10 finish here to earn a spot automatically. The chances of him achieving that do not look good after he beat just one golfer home in the 80-man WGC Bridgestone Invitational on Sunday.

Woods stated then that in his current state he would not accept one of the four captain’s picks at Corey Pavin’s disposal. “Not playing like this, |definitely not,” said the fallen icon. “I wouldn’t help the team if I’m playing like this.” He didn’t mention he wouldn’t be helping his wallet either.

How UK tax affects other sports

Britain's new tax rules have implications for all manner of UK-based sporting events. Usain Bolt earns an estimated £6.6m from endorsements, and is likely to appear at 10 events this year. Had one of them been at Crystal Palace, which he turned down for tax reasons, he would have been taxable on 10 per cent of that figure – some £660,000, as well as his £100,000 appearance fee. Total bill: £357,200, leaving him around £300,000 down overall.

Already Roger Federer prefers to play his Wimbledon warm-up event in Germany rather than at the Queen's Club.

For marathon runners, who compete in few races each year, the implications are starker still. If they run two races, one of them in London, half their total endorsements would be taxable here.

The UK is currently the only nation in Europe that taxes endorsement income. Wembley Stadium lost out on its bid to host the 2010 Champions' League final after failing to provide assurances that players would not be taxed. A special waiver was introduced in March to help prevent Wembley losing the 2011 final.

In golf, Sergio Garcia has revealed he limits UK appearances due to tax. After playing in the Scottish Open last month, the Spaniard would have had to finish in the top three at the next week's Open just to break even.