Cricket clubs stumped by HMRC scrutiny

HMRC is denying that it is targeting local sports clubs after a Hertfordshire cricket club was sent a tax bill of over £14,000.

151-year-old Sawbridgeworth Cricket Club, which has an annual income of about £21,000 per year, received the bill after the Revenue carried out an assessment in 2012.

Speaking to The Telegraph, club chairman Val Waring said he was “stunned” when the bill...

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Cricket Clubs

andy moore | | Permalink

Although I went on to have a respectable career as an opening batsmen and specialist close fielder playing very junior 'park' cricket I spent much of my early teens every weekend as scorer for my local 'big' club. First, for the 2nd team then for the 1st team - I did have the honour of nearly scoring for a final at Old Trafford but the match was rained off and then later rearranged for a local club ground!

I was paid 15p per match plus a free ham and salad tea (benefit in kind?). Not to mention a the odd bottle of shandy for producing a 'neat' score-book!

But how silly can this get..... do clubs now have to set up PAYE schemes for scorers who may score for one club on a Saturday and for another on a Sunday?

How about league umpires assigned to matches by the league but paid, on the day, by the home team? So many umpires could have potentially numerous umpiring employers over a season plus their 'day job', pension etc.... Does HMRC really want so many trivial PAYE schemes to monitor? 

Will HMRC be able, given current budget constraints, to provide effective on going face to face help to all these new potential PAYE schemes? 

Should I advise my local park team that if they plan to pay a pensioner a pint of beer to score for the odd match they must set up a PAYE scheme? Will there be an allowance for use of home office, broadband etc?

 

 

 

 

Level playing field    2 thanks

andrew.hyde | | Permalink

I guess that if I were a pub landlord, and I saw my local cricket club undercutting my prices for beer and food, partly because they were sidestepping the burden of PAYE, then I'd probably support HMRC on this.

I don't think I'd have any problem with them bunging a pensioner a fiver (as casual labour) for keeping the scorebook.  Don't suppose HMRC would either.

Cash in hand

dh326 | | Permalink

Hi Andy,

I agree with your thoughts regarding the very minor payments, but it seems to me most people would be aware that paying the part-time barman "cash in hand" is against the rules, and as such I am surprised HMRC agreed to waive penalties in the Sawbridgeworth case.

Long Overdue

Myshkin | | Permalink

Everyone knows this has being going on since time immemorial in every small sports club in the country and why HMRC hasn't done anything about it before is scandalous.  No wonder proper law abiding pubs are going bust all over the country.

The problem is that most staff are just paid out of the till at the end of the night so it is only the honest clubs that are going to own up to amounts paid and the cowboys will get off scot free as usual.

Malcolm McFarlin's picture

VAT liability

Malcolm McFarlin | | Permalink

I suspect that there many amateur clubs out there who are trading over the VAT registration threshold and are blissfully unaware that they are required to be VAT registered.  The identification of 'VAT income' is quite complex for sports clubs

HMRC now being the super power it is, does have the ability to review all of its sources of information.

Malcolm McFarlin

www.mandrtaxadvisers.com

More fundamental than this    1 thanks

johnt27 | | Permalink

I think the issues regarding sports clubs are more fundamental than this. Often clubs are managed by amateurs who operate under the impression that the words "members club" or "not for profit" means exempt from tax. More often than not committees are more concerned about limitation of liability but often misunderstand what the implications of this really are.

Quite often as well, such clubs do not engage accountants due to cost issues and although some NGBs provide useful information regarding both tax and structural issues these are often poorly publicised, rarely updated and little discussed at grass roots level.

As someone who has presented on tax and structural issues specific to sports clubs for NGBs my presentations are often met with a mixture of disbelief and in some cases wilful ignorance of the rules because often clubs think they fly below HMRCs radar!

Of course the other issue is that once HMRC have got into a club's books and records this can lead to further interrogation. Again I've seen a PAYE review of a golf club that yielded nothing but led to an investigation over green fees which resulted in Corporate Tax being levied.

It doesn't therefore surprise me to see such issues coming to light. What surprises me is how long it seems to have taken HMRC to get into what is really easy pickings for them. Furthermore I wonder how many clubs out there, operating without professional advice, are in fact not abiding by the law be they tax or others.....

Joined up thinking?    1 thanks

dh326 | | Permalink

johnt27 wrote:

I think the issues regarding sports clubs are more fundamental than this. Often clubs are managed by amateurs who operate under the impression that the words "members club" or "not for profit" means exempt from tax. More often than not committees are more concerned about limitation of liability but often misunderstand what the implications of this really are. Quite often as well, such clubs do not engage accountants due to cost issues and although some NGBs provide useful information regarding both tax and structural issues these are often poorly publicised, rarely updated and little discussed at grass roots level.

As someone who has presented on tax and structural issues specific to sports clubs for NGBs my presentations are often met with a mixture of disbelief and in some cases wilful ignorance of the rules because often clubs think they fly below HMRCs radar! Of course the other issue is that once HMRC have got into a club's books and records this can lead to further interrogation. Again I've seen a PAYE review of a golf club that yielded nothing but led to an investigation over green fees which resulted in Corporate Tax being levied. It doesn't therefore surprise me to see such issues coming to light. What surprises me is how long it seems to have taken HMRC to get into what is really easy pickings for them. Furthermore I wonder how many clubs out there, operating without professional advice, are in fact not abiding by the law be they tax or others.....

I have also seen a similar situation lead to personal problems for the bar staff being paid.  In this scenario they were on benefits (jobseekers or similar) and hadn't declared the income.  It is amazing how people naturally seem to assume the context (I was only helping out the old cricket club) overrides the reality (that is they are being paid to work).  There is no mention of a similar follow up in the Sawbridgeworth case for the individual bar staff involved

Volunteers

wyoming | | Permalink

My cricket club doesn't pay anyone. Everyone who does a job around the place does it out of love for the club and the game - putting something back if you like. They might be given a bottle of something or a bunch of flowers at the annual dinner but that's it. I usually score (when not required to don the whites "just one more time" due to a lack of bodies to put a 3rd XI on the pitch) and wouldn't expect any payment. OK, I don't pay for my tea (unlike the players) but you would have to be hard-hearted indeed to try to view that as a taxable benefit.

The bar is staffed by volunteers. The drinks and snacks are supplied by the local publican at a small mark-up and we therefore keep him onside rather than have him feel he is losing trade. 

There are, of course, sports clubs that are larger concerns which cannot do everything with voluntary labour and have to employ staff. The laws on PAYE/NIC etc apply to them as much as anyone else and I'm not sure why a fuss is being made. If they get caught paying "cash in hand" and not operating within the law, they deserve to suffer the consequences.

 

 

 

.    1 thanks

ireallyshouldkn... | | Permalink

I'm glad to see HMRC actually doing some tax investigation work and it seems being very fair to the club in question allowing stage payments and waiving penalties.

 I am a firm believer that they need to look at all activities no matter how big or small. Failure to do this just creates a "get away with it" culture at the small end. 

 

 

Clubs

ver1tate | | Permalink

Another issue that clubs do not seem to be aware of is ownership.

When someone joins a club, they may be issued with one or two shares. They may leave the club for a variety of reasons, and when a new member joins, he will also be issued one or two shares. A problem may arise if the club members propose to sell the club in the future. There may well be former members who still hold still hold shares which have never been cancelled and may well hold control of the club.

Club secretaries are in many cases well meaning volunteers who have no idea of the ramifications of this situation. 

Club stuff & nonsense    1 thanks

Cambridge Business | | Permalink

Most cricket clubs do not employ anybody but elect members to serve in various capacities, including bar manager, property manager, secretary, fixture secretary and so forth.  Umpires are paid a few quid, most of which covers their expenses in umpiring the match.  They will also have paid for their umpiring courses themselves out of their own pocket.  So, if the revenue go knocking on their door, I suspect they will end up with a load of claims to offset their umpiring trading loss against their other income.  "HMRC Played-on and out for nowt".

In my 40 years or so of playing for cricket and rugby clubs, I have never seen payment "out of the till" for those providing the services.  I am not sure from where Myshkin gets their information.  I obviously ought to move clubs!

However, I have seen honorariums of a couple of hundred quid being voted for at meetings.  My understanding that these would fall into the category of individual club members agreeing en masse that "X is a really good egg and out of our respect and thanks, we feel we would like to give them a present".  Non-contractual and yes, untaxed - because it is not income but a present.

My club's income is about £8,000 p.a. and we are eating into reserves.  We can't afford to pay anyone.  Most clubs are in a similar position.

HMR&C need to get a grip on materiality and focus on the international tax treaties to stop the leak of tax that should be paid by the multinationals - the lost tax take any one of which dwarfs anything all the clubs together would generate.

As for the pubs losing out, that's entirely due to supermarkets, successful anti-drink-driving campaigns, the smoking ban, more people spending time at home and not staying late and nothing to do with cricket clubs.  Most sports clubs no longer have draught beers as they do not sell enough to keep it drinkable, so they are losing out on bar takings too.

 

large or small - club or non club

evely | | Permalink

At what stage or amount does the transfer of money from one person to another not interest the HMRC?

What can actually be considered as a payment and therefore be taxed in some manner?

At the big bucks end of the scale it can be so complicated that a clever set up can reduce payments in tax.

At the other end of the scale of small clubs or activities were money changes hands what should be paid. Does the local craft fair with people selling say wood turned items, art work or cards or cakes and perhaps cups of teas and coffee all count?

When does amateur also mean you owe tax?

If I sell an etching I make in a printing class to a fellow student does that incur potential tax liabilities for me as income?

What volumes of tax will HMRC collect from small clubs - will it be more that the cost of collection? Will it reduce economic activity at the low end of turnover because it will be not be cost effective for the club to continue?

How many millions are we talking about?

 

 

 

 

 

johnjenkins's picture

I have read all the posts    1 thanks

johnjenkins | | Permalink

and I know I'm going to get hammered on this.

This is SPORT, mostly run by volunteers and should be totally exempt from all taxes (except where used for tax evasion and interest recieved) What next W.I. etc. etc.

This is tax collecting gone mad and it will have an almighty backlash.

Watch the tax take go down next year as "cash is king" rears it's ugly head.

When I played hockey years ago it was the members who ran the bar, made tea etc. etc. There were never benefit cheats cashing in. This is just a myth used as an excuse by HMRC to allow them to go on fishing trips.

No, there is no end to the lowness that HMRC will sink. So they must be prepared for the consequences.

OK you lot, shoot me down I'm ready for you.

SPORTSCLUBS

tedbuck | | Permalink

I wouldn't wish to knock the honest pubs but there are a few to whom the idea of a PAYE scheme would be a novelty. If I pay PAYE and NIC to HMG why not them? If they don't why should I? To follow that to its logical conclusion why should any of us pay tax?

Add to this that the recipient is also not paying his (sorry his/her) share of tax which means that the rest of us have to pay more for those who don't pay.

I thought fair play was the essence of sporting activities.

If they use volunteers who are unpaid then that is fine and really how it should be. Been there, done that!

johnjenkins's picture

@tedbuck

johnjenkins | | Permalink

we are not talking about pubs we are talking about SPORTS clubs, the facilities of which are there to provide a bit of after match banter. The booze is cheap because you are paying cost as the club, association or why is a NON PROFIT making organisation.

This is totally different to CIU etc. clubs who have a steward and proper bar staff.

carnmores's picture

field of puns

carnmores | | Permalink

NMW attack next

sports clubs

tedbuck | | Permalink

OK John you have a point of view but I don't agree.

Surely the point is that if the club pays a barman to run the bar then it should be returned as would any other wage?

Charities pay PAYE on their staff wages so why should a sports club be different?

I don't think HMRC are attacking Clubs where no salary is paid - how could they?

I'm not convinced that there is a great difference anyway between a sports club and a WMC they are both mutual and for the benefit of the members - the staff they have is surely only dependent on the size. I know sports clubs where the staff is considerable - think of your local golf club for instance - should they be exempt from the PAYE system? At the end of the day a wage is a wage no matter who pays it and it should be taxed as a wage.

If it isn't then all the people who do pay tax end up paying the taxes of those who don't. The most glaring example of which is the footie players stashing their dosh overseas and borrowing it back. And they can afford to pay their tax better than you or I.

Sport or business? Gift or reward?

andrew.hyde | | Permalink

There clearly is a dividing line, but the problem is in deciding where it lies.  Manchester United, we'd all agree, is a business.  Sawbridgeworth CC, from what I know of it, seems to be a sports club.  The PAYE legislation applies equally to both.

On the subject of honorariums, the term 'non-contractual' is something of a false friend.  An officer of a sports club is an office holder.  Payments that accrue as a result of holding that office, regardless of whether they are gratuitous, may be held to be emoluments. (Section 62 Income Tax (Earnings and Pensions) Act 2003 in case you were wondering).

On the other hand if the members of a club got together and presented a club official with a gift to mark (say) a milestone birthday, that could be a token of personal esteem.  It's a tricky distinction.

johnjenkins's picture

@tedbuck

johnjenkins | | Permalink

Unfortunately the "status quo" has gone because HMRC are forced to collect any money they can fron whomever they can to pay for European wastefullness, and of course a few MP's perks. How much money has been wasted on trying to deport National security risks instead of just putting them on a plane?

My point is that if you start knocking these small concerns where pensioners can earn a few bob etc. (I'm not talking about aggresive tax evasion here) there will be a backlash. So HMRC should continue to turn a blind eye as most small SPORTS clubs are run by retired members.

 

How are small clubs supposed

phil5555phil | | Permalink

How are small clubs supposed to survive. They are most often run by people with the clubs interest at heart but not the skill. Im working with a club now that has been hit with a 12 thousand vat bill because or poor records not because they have exceeded the threshold. Because they cant prove otherwise.

What should clubs expect if IR35 tax horror remains 4 those>SPA?

dstickl | | Permalink

Before I get any moans from some AWEB readers that this particular post is allegedly "off topic", may I please make a pre-emptive strike by asking:  "If you have personally allowed a major tax iniquity to persist for over a dozen years by not speaking out, then is it rational to expect any support to challenge a lesser alleged tax iniquity?" 

As the "fiscal horror" (allegedly the words of CIOT) of the IR35 tax terror STILL remains for small/independent consultants aged more than SPA (State Pension Age) remains, just what should those involved in running local/amateur cricket/rugby/sport club bars etcetera expect from HMRC, other than the treatment they're currently receiving?

With QUOTE Baker Tilly tax partner Mike Down, who is currently dealing with three similar cases, disagreed. “They are [targeting them] and there are many evidences of it. ... ,” ENDQUOTE why doesn't Mike Down also admit that there are far worse cases of targeting?  

Or, is it fair to target state pensioner workers, rather than those just involved in "games" and concomitant bars, etc? 

Just to remind those AWEB readers who think they can ethically continue to stay silent [with their MPs etc] about the "IR35 for workers >SPA stitch up", and the apparent anomalous personal "employer NICs liability" for old age pensioners, who are trying to survive because their pensions are so low, David Smith LLB CTA wrote in 2009 in Tottel's "IR35 Defence Strategies", 4th edition, pages 165-6 QUOTE:  

13.13 Some personal service businesses may be tempted to ignore IR35, and, should a liability eventually materialise, ensure the  [alleged intermediary] company is without assets whereby HMRC goes begging; the contractor then starts another limited company the next day. This will not work and, indeed, it probably amounts to evasion. Accordingly, such a course of action should never be attempted or advised.

13.14 While the [IR35] liability is initially that of the [alleged intermediary] business, not the contractor personally, the director can be held personally responsible. This is because there are powers to serve a Notice of Personal Liability on a 'culpable officer' (in accordance with Social Security Administration Act 1992, s 121C) where he knowingly failed to make the necessary deductions.

13.15 There is a right of appeal and the onus is on HMRC to prove their case (SSAA 1992, s 121D(4)).    If HMRC do so there is a real risk of imprisonment, as well as a fine. 

13.16 While it is considered unlikely that many directors will be pursued, it is not impossible; and contractors who intend to abuse companies may be in for a big shock. Indeed criminal proceedings may be instigated in accordance with SSAA 1992, s 115. There are also criminal offences of fraudulently evading income tax (FA 2000, s 144) and NICs (see SSAA 1992, s 114). These provisions were not designed with IR35 in mind, but are drawn widely enough to apply to service companies. 

13.17 So far as PAYE income tax is concerned, HMRC have powers under the Income Tax (Pay As You Earn) Regulations 2003, SI 2003/2682, reg 72, whereby in certain limited circumstances, they can pursue the individual personally. ... 

13.18 In the author's experience, HMRC have never successfully transferred an IR35 liability to a contractor, despite threats to do so. ENDQUOTE 

SPECIFIC QUESTION: Have HMRC ever successfully transferred an IR35 liability to a contractor, e.g. since 2008, please? 

GENERAL OBSERVATION & QUESTION: The above Smith extract may contain out-of-date law references; can any AWEB reader provide updated info, please?

 

SUM UP: What "fair" treatment should sports clubs and concomitant bars expect, if the above IR35 tax horrors remain for state pensioner workers, i.e. workers aged over or > SPA (State Pension Age)? 

johnjenkins's picture

So really all

johnjenkins | | Permalink

small SPORTS clubs have to say to HMRC is "we don't pay staff it's all voluntary". I don't think I need to say anymore.

@dstickl There are enough contracts for service out there to undermine any HMRC attack. All it needs is a bit of common and IR35 is completely dead and buried. However I do take your point and agree that there is nothing that HMRC won't go after. Weight Watchers beware.

Let's throw CASC status into this!

johnt27 | | Permalink

I'm a keen advocate of Community Amateur Sports Club status but I know there are many who see it as a gimmick. At present the advantages are marginal for a truly mutual sports club who don't generate any outside income from non members and it certainly wouldn't solve the PAYE issues that HMRC are currently looking at. It does though legitimise a sports clubs' presence with HMRC and should help to minimise any shocks coming out of the woodwork. The government want to consult on bolstering CASC status to allow payment of players etc whether this will be tax free is unclear at the moment but it would certainly be great if it was.

I'm not really into discussing the morals of HMRCs tactics or whether or not sports clubs should be tax exempt, but imagine the potential abuse this could create in an unregulated sector when compared to some of the recent things we've seen in the charity sector that is regulated!

In our post Olympic legacy run off the biggest killer for sports clubs isn't PAYE, CT etc it is VAT. It makes constructing, developing, maintaining and operating sports facilities more expensive than it should be. Most amateur sports clubs are generally not in a position, from a structural, administration or knowledge point of view, able to negate this cost by claiming zero rating or VAT registering.

Soap box dismounted!

Tom 7000's picture

CIC

Tom 7000 | | Permalink

stick em in CICs...I think that deals with the VAT

johnjenkins's picture

I suppose

johnjenkins | | Permalink

what it really boils down to is that compliance will be everywhere with no room for flexibility. No room for error anywhere.

It's quite amazing that countries with unelected dictators who force their will upon their people are now fighting back, yet Europe is becoming exactly that.

Pay for Accountants

dh326 | | Permalink

phil5555phil wrote:
How are small clubs supposed to survive. They are most often run by people with the clubs interest at heart but not the skill. Im working with a club now that has been hit with a 12 thousand vat bill because or poor records not because they have exceeded the threshold. Because they cant prove otherwise.

With respect the club concerned should have invested a couple of hundred pounds a year to have an accountancy firm sign off their books and ensure adequat record keeping was in place.

Inflexible???

dh326 | | Permalink

johnjenkins wrote:

what it really boils down to is that compliance will be everywhere with no room for flexibility. No room for error anywhere.

It's quite amazing that countries with unelected dictators who force their will upon their people are now fighting back, yet Europe is becoming exactly that.

HMRC in this specific case waived penalties and allowed an affordable repayment plan, doesn't sound too inflexible to me.  If my company paid people for years without deducting PAYE I would expect to be hammered and can't see any logic as to why any reasonable person running a sports club would believe otherwise.

My personal view would be that sports clubs receive particular releif for VAT and "Corp tax" but removing the PAYE obligation would be a minefield. 

johnjenkins's picture

@dh326

johnjenkins | | Permalink

The only reason why HMRC waived penalties and drew up a repayment plan was the alternative was to close the club, then they would get nothing. Even then the club had to raise a loan and have fund raising events. We are talking here of club income of £21k.

As for logic, most people that run these clubs do so cos no one else wants the responsibility and can you wonder why. So they are not Accountants or bookkeepers that have knowledge. So your answer would be to not have a club unless someone with all the knowledge is able to run it. Watch sport in this country go down the pan.

Typo by OP in paragraph with > "£30,00" a year, perhaps?

dstickl | | Permalink

dh326 wrote:

 ... My personal view would be that sports clubs receive particular relief for VAT and "Corp tax" but removing the PAYE obligation would be a minefield. 

OK, but what exactly is the CT relief currently allowed to CASCs, please?

REASON: OP seems to me to have made a typo in the paragraph stating:

Community amateur sports clubs are exempt from corporation tax on profits of less than £30,00 a year, but employees such as bar staff are subject to PAYE.

@JohnJ Get Advice then?

dh326 | | Permalink

johnjenkins wrote:

The only reason why HMRC waived penalties and drew up a repayment plan was the alternative was to close the club, then they would get nothing. Even then the club had to raise a loan and have fund raising events. We are talking here of club income of £21k.

As for logic, most people that run these clubs do so cos no one else wants the responsibility and can you wonder why. So they are not Accountants or bookkeepers that have knowledge. So your answer would be to not have a club unless someone with all the knowledge is able to run it. Watch sport in this country go down the pan.

 

No my answer would be for the club to spend a very modest amount on competent professional advice.  The club wouldn't let an incompetent batsman open the batting for them, so why risk the future of the club by asking someone without the appropriate skills to manage the finances.  Lets remember this was for PAYE infringements, any sensible person in this country knows bunging someone cash from the till is not allowed, regardless of whether you are a sports club or even the NSPCC or other noble charity.

I am no lover of HMRC but given the offence I personally feel the acted reasonably in this situation.  From experience I agree that running a sports club in this country is a burden, and if you feel the tax policies are a barrier, then its not for HMRC for applying them you should complain, its the treasury.

CICs    1 thanks

Myshkin | | Permalink

"stick em in CICs...I think that deals with the VAT"  Er why?

And it is not entirely clear why this is all the fault of wicked Europe - what on earth has that got to do with it? I am surprised at the number of people that say that it is only volunteers/players etc that man bars and are unpaid.  I have involvement with about a dozen football and rugby clubs over the years (sorry no cricket) and every single one paid casual staff out of the till.  Maybe there is confusion between what HMRC are told and reality.

 

More strength to HMRC's arm on this one I'm afraid.

Relief

dh326 | | Permalink

Its not profits of £30,000 per year.  They are exempt from tax on any profit level providing TURNOVER is less than £30,000 per year, a big difference to the implied relief in the article.

http://www.hmrc.gov.uk/charities/casc/tax-relief.htm

CASC

johnt27 | | Permalink

The exemptions for CASCs are in relation to non-mutual trading and are as follows:

Up to £30,000 trading income - profits not taxable

Up to £20,000 rental income - profits not taxable

Interest and Capital Gains are also not taxable

CASCs also enjoy 80% mandatory rates relief on any property they own which can be considerable as sports clubs are not entitled to small business relief on rates

johnjenkins's picture

@dh326

johnjenkins | | Permalink

I take your point and you are totally correct. However most sports clubs have varying degrees of skills so the opening batsman might not be as skilled, just as the only person to run the bar might not be.

Your views, like many, are based on everything has to be black and white so that there cannot be any confusion. This does not leave any margin for error, but this country is run on common sense and flexibility not compliance and rigidity as the powers that be are constantly heading for under European command.

@Myshkin come on Europe is an easy target. My view is that the reason Government is forcing HMRC to get every penny they can from whatever source is to pay for things like EU cockups etc.

Overall I see rules and regulations all over the place yet we cannot deport national security threats - pathetic.

Tax fraud is tax fraud no matter what the amount

The Black Knight | | Permalink

If the trustees have made payments to bar staff without operating PAYE then this is tax evasion.

It does tickle me that special interest groups believe that they are above the law., and there is general outrage that if HMRC ask for compliance (no penalties note) then there is a general protest that the amount nicked was only small in the grand scale of things.

Very few sports and social clubs operate PAYE and If I were HMRC I would have them on the hit list too.

many of these cases are coming to light as there is a requirement for a PAYE scheme number to be supplied when applying for employers liability insurance now.  I suspect that is where HMRC is getting its information from. They are also lucky they are not going back 20 years too.

They are not being unfairly picked on, HMRC are merely mining a coal seam.

johnjenkins's picture

@The Black Knight

johnjenkins | | Permalink

I don't think anybody is saying that where PAYE should be operated tax should be paid, if required.

I think what most people are unhappy about is that small sports clubs have never been picked on, at least I can't remember the last time. Yet now, with all this money needed for the EU bail outs (and it will get a lot bigger) soft targets (they couldn't get anywhere with IR35) are being chased.

My point is that these small clubs will go out of existance as very few people will want to take on the responsibility of having to operate RTI.

On the other hand

The Black Knight | | Permalink

The other side of the argument is that if these clubs were better run and a better sense of social responsibility was achieved then it would not be so difficult for those that knew what they were doing to help.

I find it is an attitude problem.

as an accountant when you are asked to help out with these you find that you walk into, tax evasion (missing PAYE), trading with non members corp tax issues, substantial theft, poor or no record keeping and a host of all manner of other issues from employment law to mismanagement........It's no wonder those that know the answers stay well clear, because you are not wanted to fix but to hide misdemeanours.

As a result you often find these places are rich pickings for the type of person that thinks nicking is perfectly acceptable behaviour. After all they only took what they thought was justly theirs and greedy bankers make/steal much more.

Perhaps the HMRC spot light will change things for the better and sort out some of the dodgy characters involved....they might even notice that they also evade their own taxes.

Penalties? have the trustees taken reasonable care? No Are they responsible? yes Are they personally liable. yes....So HMRC could pursue these if they wanted......and should where the club has not come clean themselves.

Hear Hear

Myshkin | | Permalink

Well said Black Knight - if only all accountants thought the same.  Some definitely seem of the swivel eyed variety.

johnjenkins's picture

I totally agree Black Knight

johnjenkins | | Permalink

However you have missed the point (although I know you won't agree with it) that, as you say greedy bankers, large concerns etc. etc. all "get away with it" cos they got clout. The only way the smaller concern can "get away with it" is with cash.

Since the days of Gordon Brown the "Status Quo" (a blind eye was turned to a bit of scull duggery from large and small concerns) has gone, now everything has to be compliant and perfect with no room for errors.

In my view this will not work in the long run, as we are a country of thinkers not robots.

Tax fraud is tax fraud no matter what the amount

ver1tate | | Permalink

Totally agree with the Black Knight. But would also agree that HMRC allow some laxity for well meaning but uninformed amateurs.

But at the other end of the sports scale, we have all these Boot Camps and personal trainers now set up. The fees, in Scotland anyway, work out at £30 an hour per person. These trainers have as many as 20 in a class. Not a bad hourly rate for a one man business.. How many of them are registered as self employed? I have yet to speak to an accountant who has one as a client.

Personal trainers charge hourly rates that most accountants would be very glad to charge.

I now await letters from all those accountants who have one man trainers as clients.

Robots not thinkers

The Black Knight | | Permalink

It is my impression that the next generation are Robots not thinkers because their schooling has trained them that way. Government policy is designed to produce robots so that is clearly what they want.

I do however take your point John and do not want to live in a world of robots either.

the fat cats v petty thieves arguments are separate issues and one should never (in my opinion) be used as a justification for the other...

The only losers are the honest.

The laxity in the system is the civil inquiry route and the opportunity to come clean for lower penalties.

HMRC have not effectively enforced any tax law for a long time which has contributed in a major way to the current economic situation. It is also the fix (or stage one of the fix?)

johnjenkins's picture

@ver1tate

johnjenkins | | Permalink

yes I have one man trainers on my books who use assistants and paid them under the threshold, and yes all has changed since RTI. The trainer no longer has assistants, they have set themselves up as self-employed (They are not my clients and I didn't advise them). I also have clients who do "shoots" and pay pensioners and youngsters for "beating". I have advised my client that he should be operating RTI. He is seriously considering what to do for this coming season.In a lot of cases the pensioners would be better off on benefits rather than earn a few bob.

@Black Knight. Push a lion into a corner and watch out. Europe, through many reasons, is on the brink of exploding. We don't have the politicians with bottle to do a proper fix. I have long said that if Hitler were alive today he would clean up with no bloodshed. That really is worrying and our government and eu should sit up and take note of what is happening.

complicated rules

The Black Knight | | Permalink

johnjenkins wrote:

I also have clients who do "shoots" and pay pensioners and youngsters for "beating". I have advised my client that he should be operating RTI. He is seriously considering what to do for this coming season.In a lot of cases the pensioners would be better off on benefits rather than earn a few bob.

@Black Knight. Push a lion into a corner and watch out. Europe, through many reasons, is on the brink of exploding. We don't have the politicians with bottle to do a proper fix. I have long said that if Hitler were alive today he would clean up with no bloodshed. That really is worrying and our government and eu should sit up and take note of what is happening.

The trouble is when the rules become so complicated no one takes any notice just like CIS. RTI is just another example.

The easy answer would be to allow casual wages with basic rate deductions (up to a certain de-minimus level) and just report them to HMRC with an NI number, then let the employee claim back the tax overpaid.

As for our politicians. Do we actually need them anymore? Having sold out to Europe they have as much power and are of as much use as a parish council.

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@Black Knight

johnjenkins | | Permalink

Can you imagin Boris as Mayor of the UK?

carnmores's picture

well i have a trainer as a client

carnmores | | Permalink

he is scrupulously honest and keeps excellent records

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@carnmores    1 thanks

johnjenkins | | Permalink

I would say 85% of tax payers in this country are honest and perhaps 5% bent as a 5bob note. The other 10% are AC/DC. That is what is so annoying. Rules are made to try and catch the 5% (which they never do or perhaps the odd one here and there) which upset the balance for everybody else (IR35 clssic example).

my guess would be

The Black Knight | | Permalink

my guess would be:

25% are honest

50% will steal if they think they can get away with it or are advised as such.

25% will just not pay their taxes anyway regardless and will carry on evading even after they have been caught.

The Black Knight

ver1tate | | Permalink

I have long said that if Hitler were alive today he would clean up with no bloodshed. 

Not so sure about the no bloodshed, but at least he did something this government is either afraid or unwilling to do. He took the unemployed of all sexes and put them to work to give Germany one of the best road networks of its day. Many of them are still in use, not full of potholes as in Britain.

Might be a better example ...

mikewhit | | Permalink

... if the big clubs paid all their dues to HMRC.

There was that fairly recent case where a football club (someone can help here) was wound up (?) owing sums to local traders and St. John's Ambulance - effectively due to spending what should have been its tax money.

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@mike

carnmores | | Permalink

we think we understand what you say tho it doesnt make sense really

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