AS a recently retired professional accountant in private practice, I have been interested in your reports with regard to the attitude of HMRC (the taxman) towards the individual taxpayer, compared to soccer and rugby clubs.
In the recently reported case of Christa Ackroyd, one time news broadcaster for ITV and subsequently BBC Look North, Ms Ackroyd, was, apparently at the insistence of the company paying for her services (the BBC), being treated as self-employed for tax and National Insurance purposes.
There are advantages to both parties if this treatment was correct, in that the “employer” saves a substantial amount of National Insurance and also the liability as an “employer” for such matters as sick and holiday pay as well as redundancy pay. The “worker” would pay less National Insurance and tax, perhaps have higher professional costs, but lose out on “employee” benefits and state benefits.
Governments, through HMRC, have always been reluctant to attack the large paying organisations, often multi-nationals, who can match HMRC with their battery of tax lawyers and accountants. Instead they pursue the little man or, as in Ms Ackroyd’s case, woman.
The Government also have a similar approach to tax when it comes to collecting monies owed to the Exchequer by professional sporting clubs when compared to other commercial organisations and individuals.
For the most part these sporting organisations do not make profits and continue only due to the backing of often much-maligned directors.
They, like other companies, are treated as unpaid tax collectors by HMRC, collecting in particular, VAT, PAYE/ subcontractors’ tax and National Insurance. When we learn of the demise of some company, but particularly of an incorporated sporting organisation, inevitably the largest creditor is, yes you’ve guessed it, the taxman (i.e. you and me).
So why doesn’t HMRC collect the money? These organisations are in the most part cash businesses, you will not be allowed in to Elland Road or Headingley to watch a match unless you pay, and there’s no refund if the product doesn’t come up to expectation. I raised this some years ago through my then MP. The answer came back from a Minister “it is not in the public interest to aggressively pursue clubs which get into difficulties”. It will be interesting to see when the next club goes down, who the biggest creditor is. Me and you?