Sawbridgeworth Cricket Club, an amateur Hertfordshire team with an annual income of around £21,000, received the bill after the Revenue carried out a review of the club’s tax affairs in 2012.
Community amateur sports clubs are exempt from corporation tax on profits of less than £30,000 a year, but employees such as bar staff are subject to PAYE and this was where the club was judged to be plumb LBW.
The club eventually had the bill reduced when HMRC reduced penalties and have been able to agree a schedule of staged payments and have met the bill with money raised from fund-raising events and an interest-free loan.
An HMRC spokesperson denied targeting amateur clubs, but some in the accounting profession do not agree having seen an increase in such cases in the past couple of years.
The England and Wales Cricket Board is urging amateur clubs to seek advice and meet NIC payroll and PAYE deductions but of course all local sports clubs could be affected.
If you’re a member of a local sports club that might fall foul of the law, this may be an area where you need to get some advice.Talk to Barnes Roffe today