Employment Status – Spotlight: Sport Clubs & Coaches
Sport Clubs & Coaches
Over the coming months, we plan to put a number of self-employed occupations in the Spotlight. OBK Tax’s first feature comes off the back of another successful Olympics from Team GB. Sports are back on the radar for HMRC and in particular sports coaches and whether they should be self-employed or not.
Below are some guidelines for Sports Clubs to follow when it comes to ensuring their coaches would pass HMRC scrutiny for self-employment and also some handy tips for Sport Coaches when it comes to accurate record keeping.
Sports Clubs/Coaches Relationship
How do you ensure any self-employed coach would pass scrutiny with HMRC should they decide to investigate;
- They send a substitute coach in their place, with the club still paying the scheduled coach (if they don’t and instead sessions are cancelled, it is likely that they do not qualify as self-employed and is therefore an employee of the club)
- They determine their own hours and the content of their lessons for the club
- They pay a fee for the use of the club’s equipment/facility and for access to a ready-made customer base
There must also be a robust Contract for Services in place between club and coach to confirm how the working relationship qualifies as self-employment and to confirm that the coach is registered.
Clubs can also utilise the employment status indicator tool, found online at GOV.UK (link below) and can rely on the outcome of this as evidence of a worker’s status. It is legally binding, assuming you answer the questions honestly and keep a print out of the results; you will pass scrutiny from HMRC if you have a printout that states your relationship is self-employment.
Sport Coaches – Record Keeping Handy Tips
Adequate Records - coaches must keep details of everyone who pays them and when, ensuring all receipts are kept in readable form, failure to do so could end in a penalty of up £ 3,000 for each year
Travel between home and club – this is NOT an allowable business mileage as it is travel to and from the ‘principle place of work’. If claimed this can be disallowed as far back as six years, resulting in a significant bill
Business Expenses – know what you can and can’t claim for, expenses can only be claimed if they are wholly used in the business, Satellite TV (justified as research) and sports clothing will not pass scrutiny. Don’t listen to other coaches for this advice!
Paying Other Self-Employed Coaches – if you pay other coaches to deliver your programme, if they are registered as self-employed you must ensure they pass the self-employment guidelines. The easiest way for a coach to qualify this is if they need to find a substitute when they cannot make a session.
Declaring Income – it is common place to come across coaches not declaring all of their income, instead keeping some as ‘cash in hand’. Be aware HMRC will check with the venues that coaches work to find out what lessons have been delivered and payments made. If there are discrepancies’ this will be ground for investigation and potential prosecution possibly resulting in a criminal conviction.
For more information, please contact OBK Tax on 01252 704 030 (option 4).