Partner Article

Village sports clubs still under the HMRC spotlight

HMRC’s consultation exercise on the issue of the status of Community Amateur Sports Clubs (CASCs) ends on 12 August.

Against the background of HMRC’s previously well-reported attack on village cricket clubs, this now seems an opportune time to review what the consultation proposals are all about.

It is generally accepted that the original legislation for CASCs, introduced in 2002, needs clarification. Typically run by enthusiastic volunteers, small sports clubs have understandably been confused by the fact that the CASC status which provides some very valuable tax exemptions has not been extended to PAYE – the prime target of HMRC’s on-going and extremely worrying challenges.

Amendments in this year’s Finance Act have already addressed the definitions of ‘open to the whole community’ and ‘organised on an amateur basis’ as well as the introduction of new rules on ‘clubs consisting mainly of social members’. These changes were thought necessary because HMRC found the original legislation unclear and the concern was that many clubs would not qualify for CASC status.

The consultation document itself suggests that payments to players might now be permitted in some circumstances for the purposes of CASC status, but regrettably there is still no mention of taking such 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.

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 now may arguably become greater as the Real Time Information (RTI) reporting requirements come fully into force.

In just the same way students can no longer claim tax exemption from holiday earnings, cricket clubs making summer payments to players and others may find themselves falling foul of the RTI rules. Wouldn’t it just be easier to extend the CASC tax exemption to PAYE for those small clubs who play a very valuable role in the local community?

This was posted in Bdaily's Members' News section by Baker Tilly .