1. Protecting Your Club Against HMR&C Inspection
Name
Role

2. Background
HMR&C announced in 2011 would be investigating “instructors and tutors”
This has resulted in a number of inspections of sports clubs:
Aspect
Normally a telephone call
Looks into specific “aspects” of the club’s activities
Dependent on outcome can lead to full investigation.
Full
Visit to club – normally Executive and Head Coach
Review financial records for current and previous year.

3. Inspections - Main Issues Arising
Poor bookkeeping records
No receipts
No formal accounts
No historic records
Current year plus 6
Claiming incorrect expenses
Honorarium Payments
Failing Self-employment guidelines

4. Good Bookkeeping Keep detailed list of all items of income and
Expenditure
Date, Value, Reason and Who
Keep receipts for all expenditure
Organised filing system and cross reference to expenditure list.
Retain copies of all contracts
Ensure all computer files are backed up

5. Paying Expenses for Volunteers
Wholly and Exclusively for Club Activities
Exclude any personal use
Ensure expense relates to valid club activities
Must be supported by receipts and only cover actual costs incurred by the volunteer.
Do not pay Honorariums (payments not directly linked to volunteers costs on behalf of club are subject to tax)
Mileage allowance is allowed up to 45p per mile
SASA and East District rate currently 35p per mile
Do not pay for mobile phone costs unless phone is used exclusively for club business
*Do not distribute list of duties for volunteers as this could constitute a “job description”. Retain them at committee level

6. Self-Employment Guidelines The Basics
Ensure all individuals receiving payments in addition to expenses are registered self-employed with HMR&C
Keep copy of certificate with accounting records
Create a formal contract between club and individuals
Define duties
Payment rates (training, competitions etc)
Not standard fee per month
Expenses to be covered by club (hotels and travel for competitions)
Ensure individual submits invoices for services

7. Self-Employment Guidelines Avoid Implied Employment
3 ways to pass guidelines – only need to fulfil one of them to pass
Financial Risk
Individual provides all equipment to carry out work
Individual pays reasonable fee for facilities they use
Individual submits invoice for hours worked
Individual is responsible to put right any work deemed unsatisfactory
Control of Work
Individual decides on when, where and how they carry out their work.
Substitution
Club allows and requires the individual to provide a substitute if he/she cannot fulfil their duties
Ensure substitution actually happens occasionally
Club must pay contracted individual for this work and he/she pays the substitute.
Test you meet guidelines by visiting HMR&C’s Employment Status Indicator software at

8. Self-Employment Guidelines Consequences of Failure to Meet Guidelines
Club not individual responsible for meeting guidelines
Individual deemed to be an employee
Club responsible for PAYE and NI for individual
Payment to individual will be deemed to have been net of PAYE and NI.
For every £100 paid club could be liable for c. £30. Could be more if individual has another employment
HMR&C can go back for as long as individual has been involved with club up to 20 years
HMR&C will make assessment of past income of individual based on current situation
Interest on past assessment will be charged
Penalties could be levied
Criminal charges brought if deemed deliberate abuse of rules
Club (members collectively) could face charges under employment legislation for not meeting minimum wage levels.

9. Next Steps Do: Ensure accounting records are robust
If not start now, credit given for willingness to improveEnsure only valid expenses supported by receipts given to volunteers
Ensure all individuals paid sums in excess of expenses are registered self-employed and have formal contract with club
Ensure individuals submit invoices for services provided
Ensure 1 of the 3 ways to pass self-employment guidelines are met to avoid “implied” employment (visit
Don’t:
Assume HMR&C will never investigate your club
Pay honorariums
Contact HMR&C to seek advice on the topic as this will raise concerns with them and is likely to increase the possibility of an investigation.

10. Responses to an “aspect” investigation by HMR&C
All our paid individuals are registered self-employed with HMR&C
We have written contracts in place with each of the individuals
We fulfil the requirement of the Employment Status Indicator by virtue that the individuals have written into the contracts that they must provide a substitute individual who is suitably qualified to fulfil their duties in the result of their absence and this has indeed been the case on a number of occasions.
The degree of knowledge shown in that response will give the HMR&C a degree of confidence that you as a club know the rules, and are applying them properly and greatly reduce the chance of a full investigation