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Club Law and Management

by Philip Smith, Secretary of the A.C.C.

Update on the ongoing Premier League/ Sky Court case

Regular readers will be aware of this case which has been ongoing for several years and was recently written about in the November 2010 edition of the ACC Magazine.

This case concerns copyright on Premier League football which until now prevents UK pubs and Clubs to receive and broadcast sporting coverage provided by foreign providers such as Sky Italia and Nova Television. This coverage is usually provided to establishments at a significant discount from that which is charged by Sky UK for similar coverage which has made such services popular for pubs and Clubs in recent years despite their questionable legal status.

The case was heard in the European Court of Justice (ECJ) in October and the Advocate-General has recently given an opinion on the case prior to it returning to the ECJ for their judgement later in the year. The Advocate- General’s opinion was that Premier League’s restrictions on the supply of services, based purely on a customer’s location, go against the principles of a European free market economy and are an illegal attempt to restrict the free movement of goods and services.

However, it is important to understand that this is not a legally binding opinion. We must wait until the ECJ have delivered their verdict and ultimately, if the appeal is granted by the ECJ, for the case to be referred back to the Supreme Court in London for final clarification on this case. Given this, Clubs should not commence using foreign satellite systems at this time and therefore guidance previously given by the ACC remains unchanged.

It is a step in the right direction that, hopefully, will allow Clubs more choice over their provider of live sporting events and to assist in driving down prices. We note that the Premier League have already mooted the longer term prospect of there being only two or three “pan European” super broadcasters which will likely be the eventual outcome should the ECJ Judgement be against the Premier League. We are sure most Committees would agree that even limited competition in this sector should be of benefit to Clubs.

We will continue to provide updates on this case as and when they occur. In the meantime, avoid any desperate sales person who tries to convince the Club that the use of foreign broadcaster is legal and importantly avoid the lease agreements on the equipment that so often go with such an offer.

Preparing for an Annual General Meeting

The following article is an extract from Club Law and Management and is, I think, a timely reminder for Club Officers to note that a successful meeting is the result of prior planning and adherence to the rules of their Club.

March is the most common month for Clubs to hold their AGM’s and although I am aware that the ACC are fortunate enough to have many Club Officers who have a wealth of experience in the effective running of an AGM, I would remind these old hands that we have an equal number of new Club Officers who will be having to stand before the Membership of their Clubs for the first time. I am sure we all recall that this can be a daunting experience.

An AGM is held to transact certain business: the report on the ballot for officers and committee (unless they are elected at the AGM itself); the report on the accounts; the adoption of the accounts, as audited; and other reports as required by a club’s own rules.

Firstly it is essential for the AGM to be properly summoned. This usually involves a notice being placed on the club notice board announcing the date and time of the meeting and requesting motions to be submitted to the Secretary by a certain date.

The rules of most clubs provide that a notice of the AGM shall be exhibited at least twenty-one days before the date of the meeting; and the notice of any motion must be submitted within ten days following the posting of the notice. Rules can also say that the agenda must be posted for a specified number of days before the date of the meeting.

Before the meeting it is essential for whoever is taking the Chair– Club President or Chairman depending on the club’s rules–to undertake a careful study of the agenda. This will mean he can conduct the business effectively and also spot any difficult matters that might arise. Preparation is crucial to the success of the meeting.

When the meeting starts, the Chairman should satisfy himself that the requisite quorum is present. Most club rules require a quorum. This is to prevent a small, poorly attended meeting making decisions which affect the whole club.

The meeting must proceed with each item of business taken in the order in which it appears on the agenda. A normal agenda begins with confirmation of the minutes of the previous AGM, any business arising from them, then the Treasurer’s report on the accounts, the election of officers, and so on.

The presiding officer, mindful of the need for a well-ordered, good tempered and constructive meeting, must see that the agenda is followed strictly. Speakers should stand when called by the chairman and, to preserve order, only one person should be on their feet at the same time. When the Chairman rises any other speaker should sit down and this should be insisted upon. Unless this is done, a meeting can degenerate into disarray and chaos.

A proposal for discussion is a ‘motion’ and when it is accepted it becomes a ‘resolution’. Before discussion begins, a motion must be proposed and seconded. A motion that is proposed, but finds no seconder, lapses and the meeting proceeds to next business. When a motion is proposed and seconded it is open for discussion. No speaker should be allowed to address the meeting more than once on each motion, except for the proposer, who may reply to the debate. A motion may be ultra vires–that is, outside the scope of the meeting– and should immediately be ruled out of order by the chairman.

An amendment is a proposal to alter the wording of a motion and may be moved at any time during the discussion of the original motion. Special care must be taken over this if the meeting is not to be allowed to become confused. The proposal requires a proposer and seconder before it can be considered by the meeting. The chairman should present an amendment to the meeting, once it has been properly proposed and seconded, in terms such as: ‘To the motion before the meeting the following amendment has been duly proposed and seconded, that...’ The wording of the amendment then follows and the immediate discussion must be confined to the subject of the amendment. Some bodies permit amendments to be moved to amendments but it is NOT recommended for clubs. If it is allowed it can prolong discussion and make for a complicated passage of business. In practice the proposer of the main amendment may incorporate in it what he considers best in suggestions for further amendments, if he accepts they will improve his proposal. No amendment may be a direct negative to the main motion for this would merely duplicate the need to vote on a particular proposition. An amendment must be disposed of before the meeting can proceed to a further amendment. If an amendment is accepted it becomes part of the original motion; it is then called the substantive motion. Further amendments may be considered in turn until all have been dealt with. Then, discussions may continue on the substantive motion until it is put to the vote. Before the vote on each amendment the chairman should repeat its wording so that there is a clear understanding of the matter on which a vote is being taken.

Similarly the substantive motion should be read out again before the vote. When those ‘for’ and ‘against’ in each vote have been counted, the chairman should announce the result. If a large number of people are voting, the President should appoint two ‘tellers’ to count the votes. The tellers should both count the ‘yes’ and ‘no’ votes. If there is any disagreement the vote MUST be taken again. When an issue is controversial a close vote may be disputed so it is useful to be prepared for a written vote.

One further possible motion is ‘That this meeting do now adjourn.’ This takes precedence over all other business and may be moved at any time during a meeting. The Chairman should not accept such a motion if he thinks it is being moved with the intention of disrupting the meeting. The decision is made on the vote of the meeting, on a motion proposed and seconded, and without lengthy discussion. Amendments are possible but only to set, limit or extend the period of the adjournment.

The correct conduct of a meeting is not an easy skill to master, but many difficulties can be avoided if the presiding officer follows the procedures set out here. However, even this will not guarantee that meetings are without problems. Some issues will so divide the membership that heated, and sometimes irresolvable, exchanges are inevitable. Nevertheless, a basic knowledge of tried, and accepted, procedures will help ensure that most meetings are managed efficiently.

Gems Hygiene

Readers of the Magazine will be aware of our previous advice regarding a Sheffield based firm called Gems Hygiene.

It has been previously alleged by Clubs that this firm, which provides cleaning materials, will cold call businesses offering cleaning products or free samples.

Some Clubs have complained to us that even when they have explicitly refused Gems Hygiene’s services that they have still had unsolicited goods from this firm delivered and had then subsequently received letters demanding payment for the unrequested goods.

Gems Hygiene recently contacted the ACC to complain about the previous coverage of them in this magazine. We defended our coverage and gave Gems Hygiene a list of Conservative Clubs which had complained regarding their sales technique and they promised to look into these allegations and call us back, although at the date of publication, we have not received any further communication from the firm. Given this, we have no hesitation in repeating our previous information that we have received complaints from several Clubs concerning the sales technique of Gems Hygiene.

We would also ask any Club that has had, or is having, any difficulty with this firm to get in touch with the ACC.

Finally, we have heard that some Clubs now operate a practice where a note is placed on the telephone informing employees to put the phone down if they receive a call from Gems Hygiene.

Linneweber VAT claims - an update (by Ian Spencer)

HMRC Brief 11/10 issued on 16 March 2010 set out the position of HMRC in respect of claims made for repayment of output tax by any taxpayer operating gaming machines prior to the change in legislation on 5 December 2005 (which made all gaming machines subject to VAT). HMRC accepted that the decisions taken in the Tax Tribunals meant that they were liable to repay all validly made claims, whilst retaining the option to seek recovery of any repayments they make should further legal challenge prove successful. This Brief also set out that HMRC aimed to process all existing claims by 31 March 2011. What is not made clear in this Brief is that HMRC also accept that where a valid claim is accepted and repaid by HMRC, HMRC will also pay interest on the amount repaid, to provide commercial restitution to the taxpayer.

Observation of HMRC actions in a number of instances where claims have been made indicate the following positions being taken by HMRC to minimise the amounts they have to repay.

Firstly, HMRC do not appear to be paying interest at the same time they repay the tax claimed. It seems that you have to ask for this. I have acted for one club that was not repaid interest and then received payment of an amount equating to 16% of the tax repaid, the only action required was to write to HMRC and ask for this. It is impossible to say whether this is a deliberate policy of HMRC or whether there is a genuine time lag between the two payments, my advice is to make sure and write the letter.

Secondly, if you didn’t make a claim within the prescribed time limits, HMRC will (correctly) reject any attempt to submit a retrospective claim now, irrespective of any mitigation put forward. Whilst this might seem harsh I think most taxpayers would agree they would not want HMRC to have the ability to raise assessments beyond the time limits prescribed in law.

Thirdly, HMRC are rejecting claims not properly made. HMRC guidance details that a claim must be correctly made, in that where a taxpayer seeks repayment of VAT it must be specified in which VAT period the liability of HMRC to repay arises. Where claims are not quantified (i.e. where a taxpayer has written to HMRC to ask for repayment of moneys but does not specify the amount, or if an amount is requested but not referenced to a VAT period) HMRC are rejecting such claims.

Fourthly, HMRC are rejecting claims where their decision to reject repayment, notified by HMRC in writing following receipt of a claim, was not appealed to the Tax Tribunal. HMRC rely upon case law to do this, which again seems harsh in the circumstances that a taxpayer might expect to rely upon the Tax Authority to ‘get it right’, but when considering the ‘other side of the coin’ most taxpayers might agree that they would not want the uncertainty that HMRC could revisit areas of taxation following changes to the interpretation of tax legislation and raise assessments where previously there were none.

Practical Actions where claims are rejected

In the third and fourth instances detailed above the devil is in the detail. HMRC appear to be taking a ‘blanket approach’ to all claims, i.e. if not quantified by period – reject it, if not appealed - reject it. However a closer inspection of the facts might identify that HMRC have failed to take the correct actions, or have made certain (wrong) assumptions. Have HMRC written previously to reject the claim because it wasn’t validly made?

On rejecting a validly made claim did HMRC detail in their rejection the options open to the taxpayer? In both instances if HMRC were ‘negligent’ in their duties and responsibilities to the taxpayer, there is scope for requesting that HMRC revisit the claim and make the repayment.

Dealing with HMRC is not straightforward and full of pitfalls for the unwary. If either of the third or fourth instances above affects your organisation you might want to take further advice. If so please contact the author of this article, Ian Spencer on 0114 2585967/07904 864209, or by email at ianspencer@vatproblemssolved.com .