HMRC has finished consulting on the clarification of eligibility conditions for community amateur sports clubs (CASCs), but a Baker Tilly partner warns there’s an ever-present need for clubs to remain vigilant of PAYE requirements.
The Revenue said it will publish the findings of the consultations, which ended on 12 August, in the autumn.
Baker Tilly tax partner Mike Down said while the consultations suggest that payments to players might now be allowed in some circumstances for the purposes of CASC, there is no mention of taking these payments outside of PAYE.
This means that many small clubs will need to “continue to be wary of the distinction between employed or self-employed status for individuals, that are in the main being reimbursed little more than their expenses,” Down warned.
CASC status provides tax exemptions to small sports clubs, but the exemptions do not extend to PAYE.
“The fear of HMRC arriving at the clubhouse with a large and unexpected bill for back payroll taxes, plus interest and penalties, will continue to be of real concern for many clubs.
“In fact, the worry may now arguably become greater as RTI reporting requirements come fully into force,” he said.
In June, it came to light that HMRC was reportedly ‘targeting’ cricket and other amateur local sports clubs for VAT and PAYE compliance checks; something it denies.
But Down has clients affected by this, and is adamant that the Revenue is in fact honing in on these clubs.
He added that clubs may even trip up on RTI rules, due to the similarity of students not being tax exempt from holiday earnings and, for example, cricket clubs making summer payments to overseas players.
Despite the amendments to the Finance Act on the definitions of ‘open to the whole community’ and ‘organised on an amateur basis’, there remains confusion over the eligibility conditions of clubs that qualify for CASC status.
But it’s hoped that the two months of consultations will make the rules easier for both the clubs and HMRC to apply.
“Wouldn’t it just be easier to extend the CASC tax exemption to PAYE for those small clubs to play a very valuable role in the local community?” Downs asked.
The tax partner wasn’t the only AccountingWEB community member with similar sentiments.
“How silly can this get? Do clubs no have to set up a PAYE scheme for scorers who may score for one club on a Saturday and another on a Sunday? Does HMRC really want so many trivial PAYE schemes to monitor?” asked Andy Moore.
But Wyoming agrees that the laws on PAYE apply to local amateur sports clubs as much as anyone else.
Johnt27 added that the operators of such clubs, who do not regularly engage accountants due to costs, may not realise that they are liable to tax.
“Once HMRC has got into a club’s books, this can lead to further interrogation,” he added. “I’ve seen a PAYE review of a golf club that yielded nothing, but let to an investigation over green fees which resulted in CT being levied,” he added.
AccountingWEB asked the Revenue about PAYE reviews for local amateur sports clubs in a recent FOI request. However HMRC said it would exceed the fees limit of £600 and was unable to answer some of the questions as “amateur sports clubs are not identified as a distinct group within our records”.
