Club Cricket Conference

Friday, 29th March 2024

Sawbridgeworth tax hit attracts vocal Daily Mail sympathy

By Charles Randall

3 June 2013

Club cricket hurtled on to the front page of a national tabloid newspaper last week with the lead story that Sawbridgeworth CC had received a demand for more than £17,000 from HM Revenue & Customs inspectors after a trawl through their accounts.

The Daily Mail reported that the tax demand caused financial suffering at the Hertfordshire club - run by volunteers for the benefit of the community - and prompted the question whether the taxmen had their priorities right. There could be no question that HMRC were legally entitled to inspect books, but their attack on cricket looked unfair in view of the massive avoidance schemes run by international companies. The Daily Telegraph and BBC Radio 5 Live also covered the story.

The report said: "As corporations such as Google, Amazon and Starbucks avoid billions in tax, HMRC is instead targeting the tiny amounts community sports clubs pay to helpers. These sums typically run into a few hundred pounds."

The Daily Mail did not mention that HMRC warned clubs last winter, with dreadful timing, that they would be scrutinising accounts for payments that could attract tax. HMRC seemed unaware that the wet 2012 had already caused misery in cricket communities up and down the country. The Club Cricket Conference would have told them that record numbers of matches were ruined by rain, facilities at a few clubs were damaged by flooding and financial turnover plummeted almost everywhere -- causing severe hardship in many cases. Pavilions, more than ever it seemed, faced threat from metal theft, arson and criminal damage.

The ECB twice rushed in with financial help in 2012 for clubs affected by flooding in an era when more children were attracted to youth cricket schemes at clubs probably than ever before.

So it was little wonder that the Daily Mail launched a front page criticism of the HMRC crackdown. "It has left many cash-strapped clubs facing ruin after receiving bills dating back years for those who help out by doing the cleaning, making tea and mowing grass," the newspaper reported.

The Daily Mail continued: "Amateur sports clubs depend on the help and goodwill of members who, among other duties, help coach and umpire. But the HMRC says the money given to them to cover expenses or recompense them for giving up hours of their time means the Exchequer is owed unpaid tax. Some clubs have been told they must pay National Insurance contributions and have been warned they could face penalties for back-tax for failing to meet PAYE deductions. It could also leave the volunteers with income tax and National Insurance bills of their own."

The suggestion seemed to be that cricket clubs could not consider complicated tax avoidance schemes favoured by so many well known major corporations. So heavy-handed tax inspectors chose easy targets. At Sawbridgeworth, a well respected club in Division Two East of the Home Counties Premier League Cricket Club, tax inspectors spent almost five hours going through the accounts and demanded tax on one-off payments to volunteers given cash-in-hand for helping out behind the bar or for cleaning.

Payments of £125 to a few members for expenses accommodating foreign players at their homes were queried. Sawbridgeworth received a bill for £14,403 plus £3,000 in penalties and interest, some of which was waived, reducing the final figure to about £15,500. The club had to take out a loan to settle the arrears, asking their 350 members for help.

One cricket club chairman was quoted as saying: "What I find most irritating is the way the tax people are chasing cricket clubs when they’ve got bigger problems. We’re not Starbucks..."

The Sawbridgeworth chairman Val Waring said: "It’s galling when you read day after day about these companies getting out of paying tax. £15,000 hurts us a lot more than a couple of million hurts them. I am part of this out of love for the cricket club. I don’t get paid anything for it and we come back here each week and hoover the floor and put the tea on. There has got to be a bit of commonsense or some clubs are going to be shut down."

The behaviour of major corporations and the extreme lengths taken to reduce their tax liability attracted well documented indignation. Amazon, for example, most recently paid £1.8 million in tax as a tiny percentage from sales of £3.4 billion, and Google paid £6 million tax out of a UK turnover of £395 million.

An HMRC spokesman commented on the cricket club crackdown. "We want to ensure sports clubs operate their payroll correctly and pay the correct amount of tax," he said. "We are working with sports clubs to put things right if necessary."

The Daily Mail quoted an interesting point from Elaine Clarke, of the tax consultancy Cheapaccounting. "This is a tax on village life," she said. "HMRC are treating local community clubs in the same way as big business, and it’s ludicrously unfair."

Further to the article a CCC spokesman urged clubs to ensure that that they understand their tax liabilities. He added that clubs will also wish to be aware that, in future, new and renewed policies offered by their sponsors, ClubCricketCover, will have a dedicated Tax Help Line available to them for the cost of a telephone call.

http://www.dailymail.co.uk/news/article-2332987/Forget-clawing-billions-Starbucks-Google-Amazon--The-taxman-targetting-village-cricket-clubs.html#ixzz2UnrY1Wmf