The RFU has produced guidance to help community rugby clubs understand their obligations surrounding employment taxes.
Please note: There are important changes in employment procedures that clubs need to be aware of. Please see the RFU briefing note for further details – see Important Changes in Employment Procedures for Clubs (PDF 272KB).
The government wants to make sure that as many people as possible are saving for their retirement through private and workplace pensions. Auto-enrolment laws were introduced in October 2012 to ensure that more people joined workplace pensions, so companies have to provide their workers with a pension scheme and contributed to the schemes. Please see the RFU briefing note on auto-enrolment for further details on how this will affect rugby organisations who pay individuals – Auto-Enrolment Briefing Sheet (PDF 124kB).
Do PAYE and NI regulations apply to all clubs, regardless of size and constitution?
Yes. If you pay someone then you should operate a PAYE system. This applies to casual as well as contracted employees.
Is there a de minimis limit, or does this apply to me if I am paying someone £5 per week to work behind the bar (for example)?
There is no de minimis limit. You are still required to keep a record of payments to employees even if the payments are under the Lower Earning limit.
Should I be paying anyone cash in hand?
No. All payments should be processed through PAYE.
Is there any way around this (e.g. if we are a very small club)?
No. You should process all payments as per HMRC guidelines.
How about for people who are self-employed?
As you are paying the wages you must decide whether the worker is employed or self employed. You should retain whatever evidence you gather in order to prove that the employee is self employed. Obtain a copy of leaflet IR56 which will help you decide. If you are unable to decide contact the Employment Status Inspector at your PAYE office for guidance. If you decide that the worker is self employed, he is responsible for his own tax and NICs and you should not deduct them from the payment. If you decide that he is an employee, deduct tax and NI in the normal way. See Self Employed vs Employed Status For Rugby Clubs note (PDF 270kB) for further details.
What details do you need to obtain from someone before you start paying them?
You will require their Name, Address, Date of Birth and National Insurance number. You will also require a P45 from their old employer or, if they do not have one, they will need to complete a P46 form.
What system do I need in place in order to account for this properly?
If you''re thinking of taking somebody on and you would like some information before becoming an employer the Prospective Employer Pack , on the HM Customs & Revenue website, will give you all the information require. Alternatively contact the New employers helpline on 0845 6070143.
Who do I pay the tax over to, how often do I pay it and how do I go about paying it?
Depending on the amount due you must send the payment on a monthly or quarterly basis to the Revenue by the due date. The limits can be found on the HMRC website. Failure to do so may incur interest on the amount outstanding. Payments can be made electronically or by cheque.
How do I know that I am deducting tax at the appropriate rate and using the correct personal allowance?
HM Revenue & Customs issue Tax and National Insurance Tables on an annual basis. They will also forward any employee Tax code changes during the year.
What about other employee benefits (e.g. access to a physio, free kit or a branded club car)?
Certain benefits given to staff by way of their employment are classed as taxable. These include company cars, private fuel, and private medical insurance. You will be required to report these benefits to the Revenue each year on a P11d form. Full details of the relevant expenses can be found on the HMRC website.
What about payment of expenses, including travel expenses to attend games?
If an employee is being paid to travel to work, then the expenses are taxable as the expense is classed by the Revenue as home to work travel. An example might be a player being paid a fee to play and also receiving expenses to travel to his home match. Normal expenses (e.g. mileage to an away match) can be paid free of PAYE.
Where can I get more information on this area?
In addition to the links above, details of reporting requirements and applying for a dispensation can be found on the HMRC Website.
In summary, if you are paying people at any level you should contact your local HMRC office. Additionally, you may wish to attend one of the free workshops that they offer to summarise this area.