HM Revenue & Customs has rejected a claim that it is targeting community amateur sports clubs after a cricket club in Hertfordshire was landed with a tax bill of more than £14,000.
As a community amateur sports club, it is exempt from corporation tax on profits from trading activities of less than £30,000 a year and can claim Gift Aid on small donations. Unlike charities, CASCs can carry out social activities, such as running a bar, and can employ staff, but they are not exempt from PAYE.
Waring said that the majority of Sawbridgeworth’s tax bill was due to unpaid tax on pay for bar staff and tax on accommodation expenses for overseas players. She said HMRC had originally said it would charge the club an extra fine for the unpaid tax, but this was later waived.
She said she was concerned that sports clubs were being targeted by HMRC.
"My worry is that for sports clubs this is going to have a much wider, more far-reaching effect. Suppose another club, which hasn’t got a beneficiary to lend it money, gets a large bill? It would have to shut."
A spokesman for HMRC said it had discussed the risk of non-compliance by cricket clubs with the UK’s cricket boards and started "limited activity" in January.
"It is part of a normal risk-based approach to making sure businesses across the UK operate the correct payroll systems, so that everyone pays the right amount of tax," he said. "We sometimes look at specific sectors where there is a risk that the right processes are not being followed."
He said HMRC was not targeting sports clubs in particular, but added: "Sports clubs, like other types of employer, will be the subject of normal compliance activity if they are perceived to present a risk of not complying with their statutory obligations."
The club has agreed a payment plan with HMRC and was able to meet the costs of the bill by obtaining an interest-free loan from the Sawbridgeworth Sports Association, said Waring. She said a continuity fund, set up by the club to meet unexpected expenses such as broken equipment, had also been used to pay the tax bill.
"If we had to close, a lot of the senior players we have would lose what is probably their only exercise. And we have a rotary club that would lose its venue. It’s all the extra things. If this is widespread across the country, then it’s significant."