Club Law and Management
by Philip Smith, Secretary of the A.C.C.
Amendment to Pension Legislation
Currently Clubs must offer employees access to a stakeholder pension, so long as both the following apply:
- The Employee earns more than the National Insurance lower earnings limit (£97 per week for tax year 2010-2011)
- there are five or more employees working at the Club A Club does not have to offer access to a stakeholder pension if one of the following applies:
- Employees are able to join a company (occupational) pension scheme
- Employees are able to join an alternative personal pension scheme where the Club pays in an amount equal to at least three per cent of your pay From 2012 the Rules regarding pensions are changing. Starting from 2012, everyone employed in the UK will be enrolled automatically into a pension, provided they:
- are aged at least 22 years old
- have not yet reached State Pension age
- earn more than £7,475 a year
- are not already in a suitable pension scheme
Other people will be able to opt into a pension. These include:
- employees aged between 16 and 22 who are earning more than £7,475 will be able to opt in and will get employer contributions if they do
- employees aged between State Pension age and 75 who are earning more than £7,475 will be able to opt in and will get employer contributions if they do
- people earning below £7,475 a year may opt in – their employer will not be required to make a contribution, but may choose to do so.
The enrolment process will be simple and an employee may choose to opt out of the pension, if they wish. As long as you stay in, the Club will make a minimum contribution to the scheme. In most cases they will also need to contribute but the Club may choose to pay their contribution for them. They will also get tax relief from the government.
Current plans are to introduce these changes gradually, starting from 2012 with large employers, followed by medium-sized and then small employers such as the Club. To help employers and employees adjust gradually, the plan is to phase in the minimum contribution levels.
Proposed Car Clamping Legislation
The Government’s Protection of Freedoms Bill is unlikely to be opposed and is expected to become law by the end of the year.
Home Office Minister Lynne Featherstone said: “By criminalising clamping and towing on private land, this Government is committing rogue clampers to history and putting an end to intimidation and excessive charges once and for all.”
But some critics, including the British Parking Association (BPA), criticised the Government for creating “a charter for the selfish parker”, giving drivers the freedom to park wherever they want.
Once in force, the new law will mean only police, councils or official bodies such as the DVLA will be allowed to immobilise or remove a car in exceptional circumstances, such as a cars blocking a road or vehicles which are untaxed.
Land owners will still be able to regulate their land by charging motorists a fee but they must become a member of the British Parking Association (BPA), which states a fine must not exceed £75.
Under the new Bill, the clampers will face an unlimited fine and a criminal record they would have to declare to future potential employers. Towing away from private land will also be banned.
Instead, landowners will have to erect barriers or charge set fees. Train stations and supermarket car parks will be included in the legislation.
Removal of the Default Retirement Age
The Default Retirement Age has been abolished and will no longer apply to businesses from the 30th September 2011. However, as Clubs have to give any employee aged over 65 six months notice prior to making them retire, effectively the legislation means that no further retirement notices will be able to be given to employees after 6th April.
Previously Clubs were able to write to employees, not more than twelve months but not less than six months prior to their 65th Birthday, informing them that they are approaching retirement. Employees were then allowed to request to work beyond this date. From the 6th April Clubs will no longer be able to issue any notifications for compulsory retirement using this process.
The last day employees can be compulsorily retired using the current procedure is 30th September so the last day to provide six months’ notice required by the procedure was the 30th March. Clubs can still use the procedure between 30th March and 6th April but if they do so they must use the short notice provisions. This means that an employee could claim compensation up to a maximum of eight weeks wages.
After 1st October there will no longer be a retirement procedure. If the Club does want to use a retirement age then this will have to be objectively justifiable according to the needs of the Club. After 1st October there will therefore be no statutory procedures for retirement in place.
Linneweber Case Update
A reminder to Clubs who have received, or are expecting, a repayment from HMRC regarding the outcome of the Linneweber case. HMRC are not automatically paying interest on the amounts that are due to Clubs which have made a correct application. It is important that Clubs manually claim for this interest as, depending on the circumstances, interest payments could be worth several thousands of pounds (approx 33% of the total claim).
When writing to HMRC Clubs should request an interest repayment on a compound calculation. Whilst some Clubs have automatically been awarded compound interest, many Clubs are being told by HMRC they will need to launch a further appeal to claim this interest. This position appears to vary depending on the location of the HMRC office that Clubs are dealing with. Should HMRC reject a claim for compound interest and instead simply repay interest calculated at the simple rate then the Club may wish to appeal for Compound interest. Currently the claims for compound interest are being set aside whilst a case is being heard at the High Court involving Littlewoods PLC and you must appeal a rejection of compound interest in order to stand behind this claim.
Once the original claim has been made to HMRC for interest to be repaid on a compounded basis, if it is rejected this is when the Club will then have to make an appeal to VAT & Duties Tribunal. Within this appeal a request is made to stand behind the aforementioned lead case. The result of the appeal will depend upon the result of the lead case itself. Having said this, we appreciate that Clubs may simply prefer to receive interest calculated on the simple rate calculation rather than become embroiled in yet another ongoing appeal with HMRC.