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Employers National Insurance

The Chancellor announced in last year’s budget that there would be a reduction of £2,000 in Employers’ National Insurance contributions for small businesses which includes Clubs. This has now come into effect. Clubs which are currently paying £2,000 or more of Employers’ National Insurance Contributions will effectively receive a tax cut of £2,000 each year.

Most Clubs should benefit from this new allowance which will be applied from this month. This allowance provides Clubs with a starting point of £2,000 and Clubs will only have to make further NI payments once that limit has been exceeded.

The following website link provides further information on how the allowance works: This saving will be welcomed by Clubs and all small businesses.

Linneweber 1

Clubs which previously submitted a claim and received a refund for cases taken under Linneweber 1 should be aware that HMRC were successful with their appeal of this case and as such will now be seeking repayment of money previously paid to Clubs which submitted successful claims. There is a prospect of a further appeal to the Supreme Court although HMRC are seeking repayment prior to any granted appeal hearing taking place. HMRC have already started writing to Clubs and if your Club received a refund in 2010/2011 relating to the Linneweber 1 case then you will be receiving a demand from HMRC regarding repayment. This demand will include the original refund together with interest.

Any Club which has difficulty repaying HMRC should contact the ACC for financial assistance. We will be offering a special loan rate for any loans made to Clubs specifically for the purposes of repaying Linneweber refunds. Clubs are advised to pay as much of the claim as possible and only borrow the remaining money needed to settle HMRC’s claim. Some Clubs have already been successful in negotiating with HMRC for repayment to be made over an agreed schedule.

We are awaiting the decision on whether there will be an appeal to the Supreme Court. If an appeal is granted, then the final verdict will be delivered by the Supreme Court. In the event of the Supreme Court overturning the Court of Appeal’s decision these refunds will then be returned to Clubs.

Catax Solutions

We have been informed that Catax Solutions have been contacting Private Members Clubs. For the avoidance of doubt, Catax Solutions are not recommended by the ACC and we have not given Catax Solutions permission to contact our Member Clubs. Any Club who has entered into an agreement with Catax Solutions is welcome to contact the ACC to discuss the situation..

Premier League Update

The Premier League has recently won copyright cases against a Welsh Publican and a Liverpool Bar owner. Both Landlords were ordered to pay £65,000 in legal costs for breaching the Premier League’s copyright by showing football matches using a foreign satellite card. Both establishments were also ordered to cease any further similar broadcasts.

The Premier League claimed these establishments breached copyright rules by showing live matches using a satellite card, issued by a European broadcaster, during which the Premier League’s logo was depicted. The Premier League argued that the foreign decoder cards could not be used in a “public” setting and that showing the Premier League logos in onscreen graphics was a clear breach of copyright.

Clubs broadcasting similar sports coverage are deemed to be broadcasting in a ‘public’ setting irrespective of the fact that the Club is only open to Members, Members’ guests and IA Ticket Holders.

A Premier League spokesman said: “We are currently undertaking our largest ever investigations programme and have commenced legal action against several pubs and will continue to do so.

“Only Sky Sports and BT Sport are authorised to show live Premier League football in pubs in the UK and legitimate commercial subscriptions for use in pubs can be obtained from them.”

The case was the first of up to 100 prosecutions the Premier League is planning to bring up across Wales and England this season. We continue to strongly recommend that Clubs do not screen football from providers other than Sky Sports and BT Sport.

Budget 2014: Alcohol Duty Changes

The Chancellor, for the second year running, provided a strong show of support to Clubs by cutting another penny off a pint and announcing duty freezes for Cider and Whiskey. The Chancellor also announced that Labour’s Alcohol Duty Escalator for Cider, Wine and Spirits is scrapped. Apart from the duty cut for beer and the freeze for Cider and Whiskey the duty on all other alcoholic products will only rise with inflation. The Chancellor previously eliminated the Beer Duty Escalator in 2013 and also provided a penny off the pint at that time.

The ACC joins other Club Organisations and Trade Bodies in thanking the Chancellor for acknowledging the importance of the beer and leisure industry which had previously being heavily taxed above the prevailing rate of inflation.

Pubs and Clubs granted extended opening hours during World Cup

The Home Secretary, Theresa May, announced that during the World Cup licensed premises shall be able to stay open until 1.00am on days when England matches kick off at 8.00pm or later. This decision will affect England’s opening game against Italy on 14th June which is due to kick off at 11.00pm and when England plays Uruguay on June 19th when the kick-off is 8.00pm. There is no cost associated with this extension and all Clubs will be able to take advantage of this relaxation. The ACC is pleased with this decision and we are sure that many Club Members are looking forward to following England’s campaign from the comfort of their Club.

Questions and Answers

Q On New Year’s Eve we held a ticket only event and charged VAT on the price of the tickets. During the event we provided live music and singers as entertainment. We have been informed that we may not have needed to pay VAT on the sale of these New Year’s Eve tickets as it could have been defined as a ‘Cultural Event’. Is this correct?

A Room Hire charges and event tickets will attract VAT unless the reason for the room hire is a cultural event. There is no specific definition of a ‘cultural entertainment’ within VAT legislation, but it is taken to mean any live performance of a theatrical, musical or choreographed nature. In our experience this covers anything from bands, singers, comedians, dancers or similar. It is important to note that one person’s idea of culture may not meet another person’s view on this issue but it doesn’t need to, as long as the performance is live and involves music, dancing or might be seen in a theatre (or similar) then it is likely to be cultural in nature. Typically the biggest VAT savings come from not applying VAT on ticket sales for Cultural Events although you should also be able to use the same argument regarding charging for room hire for Cultural Events.

Although Clubs need to apply for this exemption on a case by case basis, there is no reason why your Club would be unable to benefit from the exemption as we have had other Clubs who have succeeded in this matter and now no longer apply VAT on the revenue from ticket sales on cultural events. There is a small chance of reclaiming VAT on past payments although most Clubs are focusing on making sure that VAT is not paid going forwards on cultural events.

I would therefore suggest that it is worth seeking to exempt any cultural events that the Club holds from VAT on ticket sales or room hire.

Q Several of our Committee Members wish to publish our Committee Meeting Minutes so that our Members can be kept up to date with decisions we make which affect the Club. We have previously not published Minutes due to employee confidentiality and other commercially sensitive information which may appear in the Minutes. Do you have an opinion?

A Further to previous questions, we advise that Committee Meeting Minutes are kept confidential. Ultimately, however, this is not a legal requirement and Clubs are free to disregard this advice and publish the Minutes on the Notice Board although few, if any, Clubs publish the complete Minutes of the Meeting on the Club’s Notice Board due to the issues you have raised in addition to matters relating to disciplinary procedures and Membership candidate elections. It is also likely that if the complete Minutes were published that this would limit the freedom of Committee Members to frankly express themselves in a Committee Meeting. Some Clubs reach a compromise by simply publishing an update on the Club’s Notice Board after a Committee Meeting which includes an overview of what was discussed in the Meeting but without include specific information concerning who said what and restricting information relating to employees and other sensitive subjects. This is often enough to enable Members to feel part of the process and that they are being kept informed of the Club’s progress.

There are good reasons why it is unwise that Committee Meeting Minutes are published and I am sure that the vast majority of the Club’s Members will understand why this is not done. A summary of the Committee Meeting may be a good alternative if the Members wish to have more information presented to them on a monthly basis.

Q Our Committee are currently deciding if we should make our Club Secretary an employee and pay a salary. Previously we have paid an honorarium to our Secretary. It is a difficult job and deserves financial remuneration; do you know how other Clubs treat the role of Secretary and the rate of remuneration offered? In recent years we have had very few willing candidates for the role, hence why we are considering employing a Secretary.

A It is probably fair to say that the majority of Club Secretaries and Treasurers are awarded a voluntary payment for their voluntary efforts and this is known as an honorarium payment. However, a not insignificant number of Secretaries and, to a lesser extent, Treasurers are now employed by Clubs and are paid an agreed yearly salary or hourly wage.

The two roles are quite separate and are not interchangeable. Making an elected Secretary, in receipt of an honorarium, an employed Secretary receiving a wage and having an employment relationship with the Club is a significant change. An employed Secretary can no longer be a Member and will be working for the Club as directed by the Management Committee. For example, the rights of a Member to vote and the rights of an elected Committee Member to vote at Committee Meetings would cease. Therefore, such a change would unlikely to be undertaken lightly.

There is no right or wrong approach to deciding if the Club should employ a Secretary or rely on the Members to elect a Secretary and the correct decision will depend on the characteristics of the particular Club in question. In many cases the decision to employ a Secretary will be made as a result of a lack of suitable Members willing to do the job on a voluntary basis, albeit rewarded with an honorarium. When it becomes difficult to elect a suitable person for the role of Secretary it is at this point that many Clubs will look into employing someone as a Club Secretary.

It is important to ensure that the situation should a change of elected to employed Officer occur, or vice versa, that everyone involved in the Club clearly understands the new arrangements and the new lines of authority and responsibility. It is not ideal if a situation arises where a voluntary Secretary considers that they are an employed Secretary and vice versa.

It is very difficult to estimate the average honoraria paid to Secretaries. It will completely depend upon the specifics of each Club and each person who acts as a Secretary. Some Secretaries may be paid an honorarium close or equal to the minimum wage whilst other Secretaries may do the role because they simply enjoy doing it and only receive a limited honorarium as a thank you for their continued assistance to the Club.

Since the Club is having difficulty finding a Secretary, the Committee should consider the rate at which the honorarium is set and decide if it needs to be increased. Whilst few Secretaries take the role purely for its financial benefits, a higher rate of honorarium may encourage some Members to consider taking on the role who had not previously thought of doing so. In addition to the financial aspect of the role, the Committee can consider if aspects of the role can be delegated to other Committee Members in order to ease the burden that the Secretary takes on. Hopefully, through a combination of reviewing the amount of work the Secretary is expected to undertake and looking at the level the honorarium is set at, the Committee may be able to adjust the role so Club Members will be encouraged to stand for election to this important role.

Q Can you confirm what Gaming Machines the Club is able to operate? We understand that there is one machine which is completely free of taxation and that this type of machine has recently had its stakes and prizes increased.

A We can confirm that the Club is entitled to 1 x B3A Gaming Machine and that this machine is free of taxation. Any other Gaming Machines that the Club have, such as the B4 machine, will have Machines Games Duty applied to the machine’s profits. It is only the B3A gaming machine which is free of tax and the Club can only have one of these machines in situ.

The stakes and prizes for a B3A machine are set at a maximum stake of £2 and a maximum prize of £500. B4 machines can also now offer a prize of up to £400 and a stake of up to £2. You may have an old B4 machine with the £1 stake and £250 limit. These machines can now be updated to allow the revised maximum stakes and prizes.

If you are about to change or update some of your machines you may wish to contact Dransfields for a quotation to see if they can save you money. They are our recommended suppliers and I do know they have some exciting machine innovations in the pipeline.