Imogen BennettThe 108th PGA Championship teed off at Aronimink Golf Club in Pennsylvania on Thursday 15 May 2026, with several British players in contention for the Wanamaker Trophy and a share of the tournament's record purse. What most fans following the leaderboard at home will not see is the immediate financial reality awaiting every UK competitor before their cheque clears: the United States Internal Revenue Service withholds tax on prize money at source, often at a flat 30%, long before a single penny reaches a British bank account.
For Tommy Fleetwood, Matt Fitzpatrick, Tyrrell Hatton and every other UK-resident professional in the field, the gross prize figure flashing on screen is not what they take home. The PGA Championship's total purse for 2026 stands at a reported $19 million, with $3.42 million earmarked for the winner. A British golfer lifting the trophy would face an immediate US withholding hit, followed by a UK self-assessment liability — and the interaction between the two is precisely where careful planning makes six-figure differences.
How US withholding tax works for non-resident athletes
Under section 1441 of the US Internal Revenue Code, tournament organisers are required to withhold federal income tax from prize money paid to non-resident athletes. According to the IRS, the standard flat rate applied at source is 30% on the gross amount — meaning a $1 million prize would have $300,000 deducted before any payment is made.
A UK-resident player can apply for a "central withholding agreement" (CWA) with the IRS, which allows withholding to be calculated on net rather than gross income, recognising deductible expenses such as caddies, coaches, agents and tournament-related travel. Without a CWA in place, the 30% bite applies to the headline figure, regardless of how much of that prize will ultimately be consumed by costs.
The UK side: residency, the double tax treaty, and HMRC
UK-resident golfers are taxed on their worldwide income by HMRC, which means PGA Championship winnings must also be declared on a UK self-assessment return. The 1975 UK–US Double Taxation Convention published on gov.uk prevents the same income from being taxed twice — but the relief is not automatic.
A British player must claim foreign tax credit relief on their UK return for the US withholding already paid, providing IRS Form 1042-S as evidence. The credit is capped at the equivalent UK tax that would have been due on the same slice of income. With UK additional-rate income tax sitting at 45% for earnings above £125,140, a top-bracket UK golfer typically owes HMRC the difference between the 30% already deducted in the US and the higher UK rate.
State taxes are the part that catches British players out
Pennsylvania, which hosts the 2026 PGA Championship, levies a flat 3.07% state personal income tax that applies to non-resident athletes earning income within the state. This is in addition to federal withholding, and the UK–US treaty does not cover sub-federal levies. The Forvis Mazars tax analysis of Rory McIlroy's 2025 Masters win highlighted exactly this issue: Georgia state tax of roughly 5.75% on the prize money was not relievable against UK liability, becoming a genuine cost.
For a UK golfer finishing in the top ten at Aronimink and earning, say, $400,000, the Pennsylvania slice alone is around $12,000 — money that simply leaves the wallet with no UK credit available.
What this means for British viewers and aspiring professionals
The leaderboard story is rarely just about who lifts the trophy. For UK fans watching Fleetwood or Fitzpatrick make a Sunday charge, the financial machinery behind that prize money is a useful reminder of how cross-border income works for any high-earning Briton — not just professional golfers. The same principles apply to UK-resident YouTubers earning US ad revenue, consultants invoicing American clients, and authors collecting US royalty cheques.
Three rules tend to determine how much foreign-earned income a UK resident actually keeps:
- Withholding versus final liability. Tax taken at source is rarely the end of the matter. A UK self-assessment return reconciles the two systems and either claims credit or settles a top-up.
- Treaty coverage. Federal-level treaties relieve federal-level tax. State, provincial or municipal taxes generally fall outside the treaty net.
- Documentation discipline. Without Form 1042-S, W-8BEN and clean expense records, HMRC reliefs become difficult to claim. Players who treat paperwork as an afterthought routinely overpay.
When to bring in a wealth manager
For UK professionals — sporting or otherwise — earning material income from US sources, the case for engaging a wealth manager or chartered tax adviser specialising in cross-border matters is straightforward. A central withholding agreement application alone can take 45 days to process with the IRS, meaning planning has to begin months before the income event, not after.
Specialist advisers can also model the impact of holding intellectual property (such as image rights or endorsement income) through different structures, helping clients keep more of what they earn within the bounds of HMRC's compliance regime. With the UK government continuing to tighten rules on non-domiciled residents from April 2026 — a change that affects many high-earning sportspeople — the cross-border picture has only become more complex.
A qualified wealth manager can review your existing structure, flag exposure to double taxation, and coordinate filings on both sides of the Atlantic so that nothing is missed. For UK residents earning meaningful income from US sources, the cost of a one-hour consultation is typically recovered many times over in the first reclaim cycle.
This article is for general information only and does not constitute tax or financial advice. Tax rules change frequently and personal circumstances vary; readers should consult a qualified professional before acting on cross-border tax matters.
