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).
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.
The word retainer is often used in sport to describe a fixed fee paid by a club to a self-employed coach/worker for certain services, with the fee usually being paid on an annual basis.
This is not strictly speaking a retainer in the correct meaning of the word – an actual retainer is a fee paid to ‘retain’ the services of a worker, i.e. a payment to ensure that the worker is available to work for the club when required. It would typically be paid to an experienced coach as an inducement to stay at the club.
We come across a lot of clubs and coaches who assume that they won’t have any problems with the tax authorities (HMRC) because the amounts of money involved are so small, and therefore HMRC just won’t be interested.
There is some truth in this – HMRC will not generally dedicate resources to investigate clubs or coaches if the amounts involved are insignificant but that does not mean they won’t take action if they find out about any issues or discrepancies.
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.
The latest in a recent spate of club official frauds in sport has again highlighted the need for clubs and associations to ensure that they have some basic checking in place to protect club funds from fraudsters.
The treasurer of Yorkshire Lawn Tennis Association stole almost £300,000 from them over a period of six years and was this month sentenced to two years imprisonment. Basic checks and procedures were not in place which enabled the fraud to take place over the six years and the association also made the decision not to report the matter to the authorities when they first realised what was happening in 2012, despite having identified the amount then missing to be over £70,000.
You have one calendar month to register for VAT if your ‘vatable’ income from services you have provided for the previous 12 months has exceeded the VAT threshold limit (currently £82,000 as at July 2015).
Your ‘vatable’ income is the income from services you provide that is subject to standard, reduced or zero rated VAT. You do not include any services that are exempt from VAT or that are outside the scope of VAT in the income calculation. What income should and shouldn’t be included will depend on your legal status, e.g. a not for profit club’s membership income is exempt from VAT and therefore would not be included in the ‘vatable’ income calculation.
The recent case of Eynsham Cricket Club has again highlighted the need for clubs to get advice directly from HMRC when considering any form of building project.
The club were wrongly informed by independent experts that their new pavilion would not be subject to VAT because they were registered as a Community Amateur Sports Club and were not for profit. The club went ahead with the project but were then told last September by HMRC that the building project would be subject to a £34,000 VAT bill, money the club does not have and could now mean that the club is forced to close.
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.
A sports club can indeed choose to incorporate as a limited company by shares but it is not advisable for a club that is not for profit.
A club that is not for profit will need to demonstrate to potential funding organisations and to the tax authorities that any profit/surplus it makes is NOT distributed to the members of the club but is instead reinvested back into the club. This would be contrary to the structure of a company limited by shares, where the shareholders would normally be paid a dividend based on the financial performance of the company.