Long-established cricket club at risk following HMRC crackdown

3rd June 2013

A long-established Hertfordshire cricket club has been left on the brink of extinction after it received a visit from the tax authorities regarding its accounts.
Sawbridgeworth Cricket Club was visited by HM Revenue and Customs (HMRC) as inspectors spent around five hours going through the club’s detailed accounts, asking questions about payments to its staff.
The end result saw the club being stung with a bill for £14,403 - HMRC’s assessment of what the 151-year-old club owed in untaxed earnings of bar staff, accommodation and ‘perks’ for professionals, and a host of other items, dating back over the last five years.
Val Waring, the club’s chairman, expressed her astonishment upon receiving the bill.
"I thought the club might have to close and that would have been a disaster," she said.
"I suppose we are easy pickings because we don’t have piles of accountants. It’s a bit like a David and Goliath situation."
Many other clubs fear they too could be forced to fold if the tax inspection teams take a tough line about payments and penalties. Clubs are having to give information about financial support from sponsors and are worried this could frighten away potential investment in the future.
In order to meet HMRC standards, the England & Wales Cricket Board (ECB) has issued guidance notes to all clubs, urging them to seek advice and warning they could face penalties for failing to meet PAYE and NIC payroll deductions.
Jo Nockels, training and communications manager for TaxAssist Accountants, said: "Although HMRC are only investigating clubs within one county at the moment, given the ‘windfall’ they’ve had with just this one enquiry, it seems plausible that they may venture into other counties.
"If you think you are at risk of having underpaid PAYE and National Insurance, it is important to act fast and facilitate the enquiry being concluded as swiftly and painlessly as possible.
"As the ECB have said, it is sensible to seek professional advice – as a minimum from your club’s accountant but possibly from external advisers also. And be bold – double-check HMRC’s calculations, negotiate with them to keep penalties and interest to a minimum or ask for a payment plan."

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