Club Law and Management
Machine Games Duty (MGD) – Penalties for late filing
HMRC have conceded that with the introduction of Machine Games Duty that some Clubs may have experienced difficulties regarding their first MGD return which is due to be made to HMRC.
Therefore, if any Clubs have submitted their first MGD return after the submission deadline HMRC will not apply a financial penalty on this occasion. Whilst the penalty may show on the Club’s account, it should be removed once the overdue return is made. All penalties for late filing of first returns should effectively be cancelled.
Penalties other than those for late filing and payment are not affected. If a Club fails to submit a MGD return, then HMRC will raise an assessment for the accounting period – that is HMRC will calculate what they consider what the Club owes for the period using the information the Club provided at initial registration.
HMRC is committed to providing support for Clubs during this initial period of adjustment. If the Club is having difficulty with the MGD return then please let either us or HMRC know and we will do our best to assist. Clubs should ensure that all future MGD payments are made on time as HMRC are unlikely to be as forgiving in the future.
UK Safety Management Ltd
We have been contacted by a Club who were telephoned by this company. The company asked the Club if they would like to use their services to carry out appliance testing and whilst the person on the phone stated that only the Committee could make a decision in this matter, this company subsequently dispatched an engineer to the Club’s premises and an invoice was then sent to the Club. Whilst the Club managed to contact UK Safety Management Ltd and have the invoice cancelled, this is a useful reminder that sometimes companies will contact a Club by telephone and employees and Committee Members must be careful when speaking to such companies not to make any agreement over the phone. It is important to be assertive when speaking to such companies and to clearly inform them that the Club does not wish to use their services. If any other Clubs have experienced problems with UK Safety Management Ltd then please let us know.
Live Entertainment – HMRC accepts that VAT is not applicable on door admission and ticket charges
HMRC have agreed that when a Club holds an evening with a live entertainment component that this should be treated as a ‘cultural’ event. This means that VAT would not be payable on any door entry fees or tickets for any event which can be defined as ‘cultural’. VAT is still applicable to events such as disco’s where the music is pre-recorded but if Clubs have evenings with live singing or live music then VAT should not be paid on the tickets sold for the event or for door entry fees.
This is a useful win for Clubs and we hope that this will save Clubs money if they have previously paid VAT on the admission fees relating to such events. As a reminder, VAT is not applicable to snooker, billiards and pool income and this income should therefore be treated as exempt from VAT. We still have cases where HMRC attempt to charge VAT on this income and we have always been successful in appealing against such decisions.
Performance Rights Society (PRS) Letters
We understand that Clubs are receiving letters from PRS indicating that they have not paid for a PRS licence even when the Club has paid for a license. It appears that this is part of a bulk letter distribution by PRS and that some Clubs who have legitimate licenses may be receiving a letter which states that they need to purchase a license. In order to avoid paying twice, please ignore a letter indicating that the Club requires a PRS license if the Club has previously paid for a license which is still active. If there are questions over whether the Club’s license is still valid then you can contact PRS to confirm the Club’s current status.
PRS licences are required if the Club plays music inside the Club and cover the use of the lyrics and composed music in any public performance of music, on behalf of the song writers, composers and publishers. This includes using the radio, CDs, and streaming on the internet, music on television and also live music performances.
Police/Emergency Services Advertising Scam
This is a reminder to all Clubs of a widespread and long standing scam involving a telephone call being received by an Officer or an employee at a Club which implies that it is someone calling on behalf of either the Police or one of the other emergency services. The call is to confirm that the Club wishes to place an advert in their handbook or calendar. Many Clubs will already be aware of this practice. The exact wording of these calls varies but essentially the call is designed to create the illusion that the person taking the call thinks that they are speaking to an official police representative and that the Club may have previously authorised such an advertisement. No specific details, costs or publication information are given during the call. Sometime later the Club will receive an invoice for an ‘advertisement’ and, when questioned, this company will claim that they spoke to a representative of the Club who authorised the advert and that payment is required.
Please ensure that all employees and Officers of the Club are vigilant regarding unsolicited calls of this nature and if your Club does receive a fraudulent, or questionable, invoice please do not make any payment. It is likely that these types of bogus companies will attempt to threaten the Club into paying the invoice although they will never resort to legal action despite repeated threats to the contrary. If any Club is concerned that they may have paid for such an advertisement or are in the process of being threatened by any such company please contact the ACC so that we may provide specific advice.
Questions and Answers
Q. We recently had a Committee Meeting which was abruptly closed by the Chairman whilst the Committee were in the middle of discussing the final item on the agenda. Whilst this item had caused significant debate among the Committee a conclusion was in the process of being reached and the remainder of the Committee considered that a vote should have been taken on this agenda item. Can a Chairman close a Meeting in the middle of a discussion?
A. Whilst the Chairman has the power to conduct the Meeting, he does not have the power to unilaterally close the meeting. The meeting has an agenda which should be adhered to and then the Meeting should be closed. If a matter arises which is not on the agenda and cannot be dealt with in Any Other Business then it should be put on the agenda for the next Committee Meeting. For example, substantive motions should not be dealt with as Any Other Business and should be placed on the agenda for the next Committee Meeting. The Chairman should follow the publicised Agenda for the Committee Meeting and should not close the meeting until the Agenda has been completed. The Chairman should be careful not to close a Committee Meeting against the will of the Committee Members present. In this situation the Chairman should have allowed the proposal in question to go to a vote, particularly when it seems that a large majority of the Committee wanted to vote on this issue. The Chairman is first among equals and must respect the Members of the Committee and conduct meetings accordingly. Whilst Meetings should not be allowed to become disruptive, unilaterally deciding to close a Meeting is rarely the best way of dealing with such a situation.
|Q. A Member has asked whether the new style electric cigarettes are legal to be used in the Club. Apparently they have a small cartridge inserted which gives the impression of smoking and are actually been retailed as an aid to give up cigarettes. I am assured there is no nicotine or toxins included in the device.|
|A. I would suggest that the Committee do not allow such a device to be used. I am not entering into an argument that the device is not a cigarette and is therefore not illegal, my advice is based purely on the fact that the device looks exactly like a cigarette and therefore will either give the wrong impression about the Club and may give rise to complaints being made, or it may indicate to other members or guests that the Club permits smoking and that as a result they light up a real cigarette which could create serious problems for the Club. Some devices of this nature also emit a smell or odour when used.|
Q. We have recently started running a ‘Member on the Spot’ competition in which every Wednesday, at some point during the evening, a number is drawn which correlates to a Member’s membership number. If the Member is in the Club at the time then they win the prize pot. If the Member is not in the Club at the time then the prize pot rolls over to the next week and £10 is added. It is currently around £250. A ‘winning’ Member who was not in the Club at the time has told us that this game is unlawful. We do not charge the Members for this game, in which all the Members are automatically entered into, and the only requirement for winning is to be in the Club at the time their number is drawn. We find this is a good way to get Members into the Club on an otherwise quiet evening. Are we acting unlawfully?
A.This is a completely lawful game and one which many Clubs use to increase Membership attendance on quiet evenings. I suggest you just make sure that the rules of the game are clear (that the draw will be conducted at some point on Wednesday evening and that to win the prize the selected Member must be in the Club at the time of the draw) and that you allow any Members to ‘opt out’ if they do not wish to have a chance of winning the game. Otherwise, I hope that the game continues to encourage Members to make use of the Club on the evenings of the draw.
Q. We have received a document concerning our VAT registration number and we duly filled in the document and returned it. Apparently it turns out that in filling in this document and returning it we agreed to pay £797. We just thought it was an official document which we had to fill in and return to simply confirm our details. Do we have to pay this invoice?
|A. I am pleased that you have raised this matter with us and that you have not yet paid the invoice. Please do not pay this invoice or any invoice which may follow. Please forward all such invoices or communications that you receive from this company to the ACC. A number of Clubs have received this letter, entitled ‘Publication of companies and VAT Registration Numbers in the UK Corporate Portal 2013’, which suggests that ‘as part of the changes to the EU economic package, obligating all companies to provide their VAT Registration Number on various documents since 2010, we as a publisher of leading internet portals are required to update our database’. The Company in question is a German company called TVV Tele Verzeichnis Verlag GmbH and its website address is: http://www. uk-corporate-portal.com/ which is mentioned in the letter. The letter which Clubs have received looks very official and includes the Club’s name and address and a form to complete and return to the Company. However, if the form is completed and returned then the Club agrees, via the small print, to pay £797 annually which the company states is an advertisement charge. We strongly advise that this form is not completed, is not returned and if received is simply binned. This is a complete scam and the original letter you received was very misleading with the charge hidden in the small print. The Club was not required to complete the document and was not required to return it to this company. I strongly advise that no further correspondence is entered into with this company. If you forward to us all the correspondence you receive we will enter into a dialogue with this company if appropriate and on the Club’s behalf. Please be aware that whilst you may receive further letters, possibly threatening legal action, it is important not to make any payment to this company and simply to forward all documentation to the ACC. If you receive any phone calls please advise whomever answers to simply request that they contact ourselves about this matter and then hang up the phone.|
|Q. The Club’s Chairman gave his verbal resignation to the Committee at our last Committee Meeting as, for person reasons, he felt unable to carry on with the job. The Committee accepted the resignation and it was noted in the Minutes. The Chairman has now asked to withdraw his resignation as he has changed his mind. Is this allowed?|
|A. If the Chairman has given his resignation to the Committee, and this has been accepted by the Committee, then it would be unlikely that he would be able to reverse that decision without reference to the Committee and without the permission of the Committee. I suggest that you raise this matter at the next Committee Meeting to firmly establish if the Committee did accept the Chairman’s resignation and, if so, if they wish to re-appoint him to the position using the Club’s Casual Vacancies Rule.|
Q. The Committee has recently expelled a Member for bad behaviour. Under the Club’s disciplinary Rules, the Member is entitled to an appeal to be heard by three out of the Club’s five elected Arbitrators. A question has been raised as to how the appeal should be heard, do you have any guidance on this matter?
A. It is for the elected Arbitrators to decide how the appeal will be conducted. They may decide that they wish to re-interview the Member who has brought the appeal or alternatively they may decide that the facts have been clearly established and that they can make a decision without needing the Member to appear before them in person. For instance, if the Member has already pleaded guilty to the original allegation regarding his behaviour then the Arbitrators are unlikely to need to review the original grounds of the decision and will simply be reviewing the actual penalty which was awarded. Essentially, it is completely up to the Arbitrators to decide how they wish the appeal to be conducted and they have significant discretion in this matter. Depending on the specific case, arbitrations vary from the Arbitrators re-interviewing all the original persons involved in the case as well as considering any new information to a more straightforward arbitration where both the Committee and the Member can simply put their case in writing and then the Arbitrators make the final decision. Once the Arbitrators have made their decision then both the Committee and the Member will have to accept the decision as it stands. Neither the Member nor the Committee can request a further appeal once the Arbitrators have made their decision.