A Community Amateur Sports Club (CASC) has until the 1st April 2016 to either ensure it complies with the new CASC rules or to deregister without penalty.
HMRC should have written to all clubs to inform them of this but we have heard from a number of clubs who have not received details. The changes to the scheme came into effect on 1st April 2015 and included some welcome improvements as well as the inevitable tightening of the rules surrounding the scheme.
A recent call from a panicked committee member to our helpline highlights the need for sports clubs to be vigilant in ensuring that they check that any worker at the club is entitled to work in the UK.
The call resulted from the committee member finding out that their recently engaged coach does not actually have the right to work in the UK. The club had not carried any checks before recruiting the coach and now face the prospect of a maximum financial penalty of £20,000 (per illegal worker) should the authorities find out about the appointment. The club is an unincorporated association with little money and therefore any fine imposed on the club will be the personal liability of one or more members of the committee if the club is unable to pay.
Having just returned from a visit to a sports coach who has just received a letter informing her that she has been chosen for a HMRC tax inspection, we thought it would be a good time to remind coaches to review their business record keeping before they get a call from HMRC and to outline the top five issues coaches have as a result of an investigation.
A number of clubs were penalised by the tax authorities last year for paying volunteers so called expenses because they were deemed to be a payment for services, i.e. the volunteer was in fact a worker.
This will happen if you pay volunteers for more than their actual out-of-pocket expenses and it is something HMRC will scrutinise if they decide to inspect your club or coaching business.
Volunteers CAN be reimbursed for travel between their home and the club they are volunteering at, unlike employees or self-employed workers who cannot claim for travel between home and their ‘principal place of work’.
It is important to ensure that reimbursement is only given when the volunteer completes a claim form and lists the mileage being claimed for by journey, i.e. from postcode, to postcode, reason for travel, number of miles, and the mileage rate agreed.
You do not need petrol receipts for reimbursing such mileage (you only need petrol receipts if the club is VAT registered, in which case, the club may be able to claim some of the VAT paid by the volunteer).
You may legally require licences from THREE different regulatory bodies if playing DVDs publicly, i.e. to members, non-members or pupils. A public performance of a DVD is any showing that is outside a ‘domestic and private context’.
The Copyright, Designs and Patents Act 1988 states you need to get permission from the copyright holder to ‘perform’ music in public – and a music licence grants you this permission. Unfortunately, the rights of performers, directors and composers are regulated by three different organisations, hence you may need three different licences, depending on the film you are showing.
HMRC is actively checking the status of self-employed coaches and workers in sport to verify if they are really self-employed or are actually employees. Clubs and coaches paying other coaches should therefore verify the status of their workers without delay in order to avoid a potentially hefty tax bill.
It is a common misconception in sport that the person paying the worker (the client) can just declare the worker to be self-employed – whether they ACTUALLY are or not will depend on the way they actually work with the person and on the documentation in place. It is common to get a situation on sport where the worker is a registered self-employed worker and there is a contract in place to state this, yet the worker is declared a employee by HMRC because of the actual way the client and worker work together.
A not for profit sports club should ensure that has a constitution that clearly states that it is a not for profit organisation and should include a clause similar to the following to confirm that no profit/surplus is distributed to individual members:
The income and property of the Club shall be applied solely towards the promotion of the club and no portion thereof shall be paid or transferred directly or indirectly, overtly or covertly by way of distribution, bonus or otherwise by way of profit to the members of the Club or third parties other than other registered community amateur sports clubs or charities. No member shall be paid a salary, bonus fee or other remuneration for playing for the Club.
Do you play recorded music in your clubhouse or coaching sessions using a radio, CD player, TV or MP3 player? Can more than one person hear the music? Then you are legally required to have at least one music licence – failure to do so could result in prosecution.
Playing recorded (or live) music where more than one person can listen to the music legally requires two music licences, one from an organisation called the Performing Rights Society (PRS, representing songwriters and publishers) and one from an organisation called Phonographic Performance Limited (PPL, representing record companies and performers).
It is not illegal for someone with no accounting qualifications to call themselves an accountant so it is important to ensure that you check how qualified your accountant is before they work on your bookkeeping/accounts.
A recent survey revealed that less than 10% of organisations/individuals actually check the qualifications of their accountant, usually because they wrongly assume that you have to have qualifications to call yourself an accountant.