- South Dartmoor back to winning ways in cups
- Tom Allin tournament raised more than £5,000 for air ambulance
- Taverners kit bag delivered to Sri Lankan youngsters
- Devon trying to contact the class of 56
- Paceman Tshepo running in Virgin London Marathon
- Five Devon women in Western Storm squad for Kia Super League
- Registration night for all ages at Topsham on Monday
- Lots pouring in for auction at Allin Memorial tournament
- Thames Valley Gentlemen Cricket Club
- Bradninch add Argentinian flavour to Devon League
- Ipplepen youth registration night on Friday
- Final call for Groundsmans first seminar this year
- Devon League official tackling London Marathon for charity
- Bovey on familiar territory in Aaron Printers Cup
- Brockman Cup - Cup Kings lie in wait for holders
- Shepherd Trust helps Kingsbridge build for sustainable future
- DCL - Umpire Appointments 2016 (May 7th - July 2nd)
- Long standing records beaten
- North Devon see off Paignton chase
| Is Your Club at Risk from the Taxman? |
| We all know that the Exchequer has a record national debt to deal with at present. Many of us will be feeling the pinch in our pockets from extra tax due or a reduction in spending in the public sector. Apart from raising tax rates and cutting spending the other area which comes under emphasis in times of economic crisis are those who (either by accident or design) fail to pay the tax they should. Whilst you might think H M Revenue & Customs (“HMRC”) will be focussing their attention elsewhere, evidence from elsewhere in the country suggests they view sports clubs, and cricket clubs in particular, as being worthy of attention. In some respects, sport is something of an easy target. Clubs are, after all, run generally in people’s spare time and not all clubs are lucky enough to have accountants as members to guide them through the mire that is our tax legislation. In one county, we understand that around 70% of the clubs in the top two divisions of the league have received payroll tax enquiries from HMRC and have had to pay over a hefty £100,000 in underpaid tax, national insurance, interest and penalties between them! The penalty regime has also been changed recently so that the system for all the taxes is aligned. The evidence so far is that the average penalty being imposed on businesses who have some additional penalty is now 15 – 20% of the tax bill. An unexpected tax bill can make a big chunk out of a club’s budget so not dealing with tax matters properly up front could easily be false economy. In extreme circumstances where a club does not have the reserves to meet any settlement liability the club’s executive committee officers will be viewed as jointly and severally liable for any tax liabilities and could find themselves digging into their own pockets. So what should your club be doing to mitigate any risk of an enquiry from HMRC and what are the key risk areas? Payroll taxes Any club who employs staff or pays a “honorarium” to any of its committee members should have a PAYE scheme registered with HMRC. Don’t assume that the only potential exposure you have relates to your paid or overseas players. It can affect any club who makes payments to groundsman, coaches, bar staff, cleaners or players, in other words it can affect all clubs from the largest to the smallest; The failure to register is itself a potential problem – fines for failing to register for PAYE are £100 per month for every month you fail to register. Remember that HMRC can go back up to six years so late registration penalties on their own could be as much as £7,200; Once registered, everything can be completed online. You can find more information about how to register and your obligations at http://www.hmrc.gov.uk/paye/index.htm Simply saying, “the individual pays his own tax” isn’t a defence. There is plenty of tax legislation about what constitutes someone who is employed and someone who is self-employed and therefore accounts for their own tax. You will find it a very difficult argument to succeed in convincing HMRC that any of the usual types of role at a cricket club are anything other than employees; If someone you are paying is genuinely self-employed, for example they provide their own equipment to perform their role, decide their own hours, can send someone else to perform their role if they are sick and are taking their own financial risk, then they could be paid outside the payroll, but remember you need to get an invoice from them to support the costs; You will be required to deduct income tax and employee’s national insurance from your payments to staff and also pay employer’s national insurance as well; If you have been making payments to individuals without deducting tax, assuming the individual has been declaring the income via a self assessment tax return, you may be able to negotiate the figure payable on the basis the tax and some of the national insurance will have been paid. This approach requires careful negotiation with HMRC and will not reduce any interest or penalties; You should also remember that tax does not only apply to cash payments to staff but benefits in kind as well. Things like paying accommodation and travel costs for overseas players would be classed as benefits in kind. You should also be careful paying expenses – even if it is a straightforward as reimbursing a groundsman for petrol he has bought for the mower without a dispensation agreement that could be something that needs to be reported on a P11D; Employing people also brings other responsibilities. Staff should have employment contracts and have certain employment rights under the law. In addition, employers are required to offer employees access to a stakeholder pension scheme. As with the other types of tax there are penalties for failing to register and late payment interest charges which clubs should be careful of. If your club is not already registered as a “CASC” you should seriously consider the benefits of doing so. There can be some significant savings to be had from things like mandatory rate relief and from the ability to re-claim gift aid on donations to the club. The things I have outlined are designed to raise awareness of a potentially complex area which clubs need to consider very carefully. The points I have made are generic and cannot be relied upon as guidance to specific circumstances. If clubs are concerned about their circumstances, I would strongly urge that you take the appropriate professional advice. Jon Sparkes |