Amateur Sports Clubs - PAYE Review

28 August 2013

HMRC has finished consulting on the clarification of eligibility conditions for community amateur sports clubs (CASCs).

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.