OUTSIDE the World Championships in Moscow this year, the London Diamond League will be more star-studded than any athletics event worldwide.

A one-off tax exemption for the meeting, to be held in the 80,000-capacity Olympic stadium, means normal UK legislation does not apply.

The London Anniversary Games, on July 26 and 27, and a Paralympic event on the 28th, will move to Stratford from the traditional Crystal Palace venue. UK Athletics declined to comment yesterday, but they are aware that the Chancellor has removed the tax constraint, and they have noted a comment from Sports Minister Hugh Robertson: "We want to attract the very best athletes, and this helps us do that."

Her Majesty's Revenue and Customs waived claims on London 2012 overseas athletes, and this year's agreement will give UKA a deep war chest to bankroll the legacy meeting's line-up.

Last year's Olympics apart, the world 100 metres and 200m record-holder, Usain Bolt, has not raced in Britain since 2009. The tax burden spiked a Crystal Palace showdown between him and the next two fastest men ever (Asafa Powell and Tyson Gay) in 2010.

HMRC not only tax prize money earned in the UK, but also claim a percentage of global endorsement income – it is close to $10m annually from Bolt's shoe sponsor alone – a deal negotiated before he retained Olympic titles last year. HMRC base liability on the number of events contested in the UK. If Bolt races 10 times in a year, but just once in Britain, the revenue would claim 10% of his global earnings.

Yet most world-class sports people train almost every day of the year. Earnings are not simply the fruit of competition. HMRC's failure to grasp this is simply perverse to me.

Their argument seems to be that, without tax-funded events (like the Diamond League in London's Olympic Stadium), Bolt would have no platform and, consequently, no sponsorships. Yet international sportsmen have a choice. They can compete elsewhere, thereby bringing cost benefit to other countries.

Bolt's management staff say his UK tax liability would significantly exceed his appearance fee for a single meeting. But his London fee this year may exceed a tax-free $500,000. Any package would include Yohann Blake, his training partner and the Olympic 100m and 200m runner-up. They would not even meet. Their policy is to race one another only in major championships and Jamaican trials.

Overseas competitors won't be affected in Glasgow next year. Tax exemption is already brokered. But Paul Bush, chief operating officer of Eventscotland which manages the nation's major event policy, confirms UK tax legislation is inhibiting and unhelpful.

"There aren't that many events in Scotland which it would affect, but it's relevant for major multi-sport events like the Commonwealth Games, Open golf, Ryder Cup and tennis.

"Anything we can do as a nation to increase or retain our competitive advantage, we should. However, that's a matter for the Treasury. There will be occasions when countries bidding to host events will throw tax mitigation into the pot. For some events, such as the Olympics and Champions League final – and, I think, the World Cup – you actually have to do it. I'd prefer a uniform policy.

"We should do everything we can to attract the best athletes. It's tough enough in a competitive market, but I don't think it will impact on legacy events we're trying to attract post 2014. They're mainly sports where people don't earn vast sums – not megabucks earners like golf, tennis, football and rugby. But if we go for a jewel-in-the-crown event, like World or European indoor athletics, it could be a factor."

Given the precedent of London's athletics relaxation by HMRC, Scotland should consider making a case for 2014 anniversary and legacy events. Hampden's track will go, so won't qualify. But there's scope for gymnastics, squash, badminton and track cycling.

So what about the Ryder Cup next year? Its European director, Richard Hills, tells us they are in "regular dialogue" with Robertson, and confirms that players have raised tax issues.

"It's something we monitor," said Hills, "but there are no overt concerns for Gleneagles. We'd no evidence of the team at Celtic Manor being unfairly treated. Golfers in the Ryder Cup play as a team and are not actually wearing any of their sponsorship endorsement clothing."

When I pointed out that players use clubs for which they are paid substantial endorsements, Hills acknowledged this, "but I'm not the accountant. He deals with HMRC."

However, one would imagine Tiger Woods' career income of some $900m (including sweat-shop child-labour product-endorsement) might attract HMRC attention. Bolt's income is peanuts by comparison.

These issues underline the extent to which sport is now a business. The company which paid Woods record fees is currently trying to prevent its contracted athletes from doing lottery promotion work wearing GB kit made by a rival.

Olympic athletics champions such as Mo Farah and Greg Rutherford are among several withholding signatures on UKA contracts. Yet all have for years received valuable lottery assistance. This seems no more than reasonable pay-back.

When athletes start to make money, they are means-tested out of financial back-up, but still qualify for medical, physiotherapy, and sports science services worth some £60,000 a year.

That should cease if athletes reject UKA contracts. Indeed, when any athlete starts earning from their sport, they should start repaying their lottery support. Such funding should be like a student loan.