Salaries to be investigated by HMRC

[TigerFeetSteve]

If you have spent right up to the salary cap or close to it, but then some of your previous payments to players are reclassified as salary you are going to be in trouble, Quins went over before as they got their Maths wrong.
How many clubs spend every penny of the cap is another matter.

Would have thought that we may have heard something in the last 2 years though if they found something amiss

So you don't know. You're guessing?

Yes, I am making an educated guess that Pete & Andrea when they discussed the club's finances on Sunday and stated that all settlements etc had been paid and accounted for and we so the accounts to the June 21 will be very clean, is something they wouldn't state if they had any concerns over a tax bill from 2 years previous, certainly if it had messy implications for salary cap.

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Surely all salaries and payments submittied for inclusion in the salary cap would be before tax any way, so wouldn't have any bearing on that?

[Dangerous4]

The sword of Damocles is apparent.

[BrightonTiger]

Blimey, one mention of Tax and some people on here turn into Elliott Ness!

Took HMRC 4 goes to get my tax code right, so I won't hold my breath.

[jgriffin]

Blimey, one mention of Tax and some people on here turn into Elliott Ness!

Took HMRC 4 goes to get my tax code right, so I won't hold my breath.

Me too, 3 goes this year so far. Earned the same as last year, when I got a grand back, this year owe them £600.

[Traveller]

Would have thought that we may have heard something in the last 2 years though if they found something amiss

So you don't know. You're guessing?

Yes, I am making an educated guess that Pete & Andrea when they discussed the club's finances on Sunday and stated that all settlements etc had been paid and accounted for and we so the accounts to the June 21 will be very clean, is something they wouldn't state if they had any concerns over a tax bill from 2 years previous, certainly if it had messy implications for salary cap.

Sorry. Entirely my mistake. I was replying to another contributor who was claiming that everyone has been at it. Just asking how he knew. What evidence he had, or whether he was just guessing. It sounded as if his certainty was actually just his opinion.

[sk 88]

Surely all salaries and payments submittied for inclusion in the salary cap would be before tax any way, so wouldn't have any bearing on that?

The salary cap is effectively the gross cost to the club. So it includes pension payments and employers national insurance payments. While called the salary cap for simplicity it is really an "All payments, including in-kind, cap".

It includes image rights payments, so long as they are the normal "I pay Tigers Star Player Ltd £40k for the right to use your image on X products in a Tigers shirt" rather than the convoluted Sarries/Itoje scam of "I, Mr Owner, buy a 20% stake in Tigers Star Player Ltd as well as the club paying for your image".

So if those payments, or more likely a portion of them, were deemed to be salary rather than legitimate payment for image rights the tax would be due from the player, not the club, but the club would be liable for the Employers National Insurance contributions and that would go onto the cap for the years in question. As the employing someone tax is currently 13.8% that could be a reasonable amount over many players.

I would be pretty surprised if HMRC won unless there was really actually dodgy practice, setting a market rate surely only requires a couple of independent deals and proving it a fairly minimal amount of paperwork.

[TigerFeetSteve]

I would be pretty surprised if HMRC won unless there was really actually dodgy practice, setting a market rate surely only requires a couple of independent deals and proving it a fairly minimal amount of paperwork.

I think, given this was a request for all clubs, they were probably just doing some baseline comparisons. If say one or two out of the 13 were significantly out from the rest they would dig and do a in depth investigation. You don't look at all 13 to do a in depth investigation, you pick one to dig then look to see if similar practices were used elsewhere.

[TigerFeetSteve]

Reading the latest WRW, it's interesting to see information about what's happened in the last two years has started to trickle out.

Firstly that this investigation goes back to the CVC first talking to the Premiership.

Secondly that there has been one club (not Tigers) that had a further visit beyond HMRC asking for the books, but no more action was taken.

Thirdly, he's suggesting that any misdemeanors on the part of the clubs were likely minimal and in the past given how publicly football has had this issue drawn out. (80/20 split of wages seems to be considered the appropriate split)

[Moose]

Blimey, one mention of Tax and some people on here turn into Elliott Ness!

Took HMRC 4 goes to get my tax code right, so I won't hold my breath.

Me too, 3 goes this year so far. Earned the same as last year, when I got a grand back, this year owe them £600.

In this enlightened age of RTI, someone has seriously mucked up for it to go wrong that badly/often.

[Tigerbeat]

Blimey, one mention of Tax and some people on here turn into Elliott Ness!

Took HMRC 4 goes to get my tax code right, so I won't hold my breath.

Me too, 3 goes this year so far. Earned the same as last year, when I got a grand back, this year owe them £600.

In this enlightened age of RTI, someone has seriously mucked up for it to go wrong that badly/often.

RTI??

[Scott1]

Me too, 3 goes this year so far. Earned the same as last year, when I got a grand back, this year owe them £600.

In this enlightened age of RTI, someone has seriously mucked up for it to go wrong that badly/often.

RTI??

Real time information

[mol2]

Perhaps the other Premiership sides have triggered it to make it even more difficult for Sarries to keep players by using spurious sponsorship activity. If the endorsement income is clearly separated from your main employment then the tax man will be happy, if not the tax man will be looking for money from you and the employer. Effectively policing the salary cap with real powers to investigate. Naturally the Inland Revenue are not interested in the salary cap but tax returns may well have to add up!

[jgriffin]

In this enlightened age of RTI, someone has seriously mucked up for it to go wrong that badly/often.

RTI??

Real time information

Hence my puzzlement

[longlivethecrumbie]

RTI??

Real time information

Hence my puzzlement

This does mean, however, that Chris and I picked the wrong season for you to buy a round dear.boy.....