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Think the point is
Not read the EIM but believe these days that players effectively get them as a contractual entitlement which, other considerations aside, would presumably create a tax issue.
Rugby League
I've dealt with three Rugby League testimonials this year.
First, you need to look at the player's contract to see whether he's entitled to a testimonial or whether it's at the grace and favour of the governing body.
Assuming there's no entitlement, some of the income will be taxable, some won't be.
Some will be outright trading - player's Testimonial Committee (not the player, obviously) buy meals at a Testimonial Dinner and sell them to admiring punters.
Some won't be. The player might, for example, get some raffle prizes donated. The raffle proceeds are exempt.
Outright donations - bucket collection at its most basic - are exempt.
An auction of something given to the Testimonial Committee - exempt.
The RFL hand out information leaflets. Presumably the FA do the same.
How far up the food chain are we talking ? Premier League or Lower Hockleton Wednesday League ?
Cricket
I have dealt with 4 County cricket testimonials and endorse the comments above other than I think that profit on sales of places at a lunch or dinner would be exempt as would raffle prizes and other items listed Always assuming non contractual of course
Note that the general tax free status end in 2016 !
https://www.accountingweb.co.uk/article/hmrc-withdraw-testimonials-conce...
Trading
I have dealt with 4 County cricket testimonials and endorse the comments above other than I think that profit on sales of places at a lunch or dinner would be exempt as would raffle prizes and other items listed.
Brian - on what grounds would you consider trading profits to be exempt ?
Very good
Pending Brian's considered response, may I suggest Edgbaston, Headingley and Lords ; and certainly Sabina Park :)
Like it, basil.
Representations
Note that the general tax free status end in 2016 !
https://www.accountingweb.co.uk/article/hmrc-withdraw-testimonials-conce...
Apparently, pan-sport representations are being made. No outcome as yet.
Cricket again, and not footballers, but see Moorhouse v Dooland (1954) and Reed v Seymour (1927)
Both involve benefit matches. Not being a football or cricket fan, would assume benefit matches are the same as testimonials?
In the cases I have dealt with the profit on sales of places has been more than exceeded by other expenses (MC,PA system,hotel costs for special guests etc) which I have viewed as allowable corporation tax deductions.The money is made on the auctions and raffle prizes !
Ah!
In the cases I have dealt with the profit on sales of places has been more than exceeded by other expenses (MC,PA system,hotel costs for special guests etc) which I have viewed as allowable corporation tax deductions.The money is made on the auctions and raffle prizes !
That's a very different issue. By claiming these costs as a deduction, you imply that the income is not exempt.
These cricketers are very poor businessmen, aren't they ?
Sorry,slightly misleading there.It is also possibly a moot point as to whether some of those 'other' costs could be ascribed to the auctions and raffles.That might change the overall result
ALL sportsmen are hopeless at their finances,would not have it any other way !
Will the Government listen to those representations ? Very unlikely IMO.....Ryan Giggs enjoying £1m tax free from his THIRD testimonial match was enough for the powers that be
Journeymen
Most players don't get that. It's easy to look at the stars and extrapolate to sport in general.
Some players don't even earn enough to make a decent living from the sport.
Typical testimonial for a Div 2 RL player ? Four figure sum. After tax on the taxable bit.
Testimonials, benefits and tax
I always thought that footballers's testimonials were taxed but cricketers's benefits were tax-free.
Lesson learned
I always thought that footballers's testimonials were taxed but cricketers's benefits were tax-free.
Football took lessons from cricket back in 1954.
Football and cricket
I can remember Ian Gillard of QPR and England saying he only made £500 from his testimonial and he had to pay tax on it, while at a similar time "Flat Jack" Simmons of Lancashire got £100k tax-free.
Mixture
I don't go back that far but, as far back as I go, there's always been a mixture. I'd be surprised if Jack Simmons' benefit tie-selling activities were tax free. If that's not trading, I don't know what is.
Budget
Did anyone spot anything in the Budget about withdrawing the exemption ?
Or will HMRC just say "we've changed our minds - take it to the FTT if you disagree."
Which is what they said in similar cases in the past.
spot the ball...
I spotted the bit that said they're preserving current treatment and won't make changes before April 2016.
"2.69 Sporting testimonials – Following a recent call for evidence on Extra Statutory
Concessions, the government will preserve the current tax treatment of payments made from
sporting testimonials while it considers representations. No changes will be made before April
2016."
Budget
Not as good as it appears I would say - they were not intending to change things 'before April 2016" anyway !
Door remains open for legislation in FA 2016 to take effect from 6 April 2016 once the Govt has considered representations (for which read "carries on regardless')