Club Law and Management
Preparing for an Annual General Meeting
A Club’s Annual General Meeting 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 and other reports as required by a Club’s own rules.
It is essential for the AGM to be properly summoned. This involves a notice being placed on the Club’s Notice Board announcing the date and time of the meeting and requesting motions to be submitted to the Secretary by a certain date.
Most Clubs’ Rules 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. The Agenda of the AGM should be posted on the Club’s Notice Board at least seven clear days before the date of the AGM and no business other than that specified in the Agenda shall be transacted at the Meeting. A copy of the balance sheet and income and expenditure account for the year, with the report of the auditor/ accountant, should be posted on the Club Notice Board at least seven days before the Annual General 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 they 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 be satisfied 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. If a motion is ultra vires–that is, outside the scope of the meeting, then it 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 amendment requires a proposer and seconder before it can be considered by the meeting. In practice the proposer of the main amendment may incorporate in it what they consider best in suggestions for further amendments, if it is accepted they will improve the 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.
A 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 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.
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.
Machine Games Duty (MGD) - VAT information
MGD was introduced on the 1st February and replaces AMLD and VAT taxation on gaming machines with MGD. MGD is set at 20% and it is calculated on the net takings. That is the amount paid into a machine minus the amounts paid out. This new way of taxing gaming machines means that the rules for claiming back VAT, such as VAT paid on machine rental costs, will change as gaming machines are now considered as exempt supplies.
Many clubs will already be partially exempt for VAT as they already make a mixture of Vatable and exempt supplies.
For example, the sale of alcohol is standard rated for VAT whereas the sale of bingo and lottery tickets is exempt.
The introduction of MGD means that the taxation status of machine income will change from being standard rated for VAT to exempt.
This switch will need to be taken into account when calculating VAT liabilities from 1st February 2013 onwards.
Input VAT related to exempt supplies can be recovered subject to special rules known as “de minimis rules” which allow the recovery of input VAT relating to exempt supplies providing certain limits are not exceeded. Therefore, it is probable that the VAT on costs associated with gaming machines will be recoverable although de minimis checks will need to be carried out each time a VAT Return is prepared. An example of input VAT for a gaming machine would be the VAT paid on a machine rental agreement.
VAT Notice 706 (Partial Exemption) explains the full rules, procedures and tests to be satisfied for full recovery of Input VAT. A summary of the rules are:
- Input tax relating to all exempt supplies must not exceed £7,500 per annum or £1,875 per quarter and cannot be more than 50% of all input tax incurred in that period. If either parameter is exceeded then the ‘exempt’ input tax cannot be recovered
- The club must take into account non-attributable input tax (e.g. book keeping fees) where a proportion of the VAT incurred is attributed to exempt activities/ income and a proportion to standard rated activities/income
- The club must ensure that all input tax relating to exempt supplies is less than £1,875 per quarter
- If the de minimis limits are exceeded then none of the input tax relating to an exempt supply can be reclaimed by the club
Consider the following example assuming a quarter end date of April 2013:
- The Club has purchased 8 boxes of lottery tickets and has been charged £1,120 + £224 VAT. The lottery machine profits after paying out prizes were £800.
- The Club has been charged £40 + £8 VAT weekly rental for gaming machines totalling £520 + £104 VAT for the quarter
- Gaming machine income for the quarter was £5,200
- Book keeping fees of £1,000 + £200 VAT have been incurred
- Bar takings for the quarter were £8,000
- Bar stock was purchased at a cost of £4,000 + £800 VAT
Total input VAT incurred:
Lottery machine 224
(Lottery machine takings do not incur VAT)
Gaming machine 104
Bookkeeping fees 200
Bar Stock 800
Exempt Input VAT:
Lottery machine 224
Gaming machine 104
Bookkeeping fees* 86
Partial exemption tests:
Is total exempt input tax of £414 less than £1,875? Answer: YES
Is exempt input tax less than 50% of all input tax (£1,328 x 50% = £664)? Answer: YES
Therefore all input tax can be reclaimed but remember to check that it is less than £7,500 over whole year.
*Apportioned by exempt income over standard rated income - Lottery £800 + Gaming machine £5,200 + Bar takings £8,000 = £14,000. Apportionment = (£6,000/14,000) x £200 = £86