THOUSANDS of sports clubs across Scotland face crippling tax bills under a crackdown by revenue inspectors.
HMRC chiefs are sending an army of tax inspectors to snoop on the accounts of hundreds of local cricket, bowling, shinty and curling clubs.
It comes as global giants such as Google, Amazon and Starbucks have been accused of exploiting international laws to pay tiny amounts of tax in countries where they earn billions.
The HMRC crackdown is targeting payments clubs have made to members and volunteers who help coach and umpire, clean facilities, or mow lawns and make teas. Amateur sports clubs depend on the help and goodwill of such members.
Now volunteer tea ladies, groundsmen and bar stewards who are given pocket money payments for their trouble could find themselves facing demands for unpaid tax.
The clubs’ bills – which typically run into a few thousands of pounds – are dwarfed by the sums that multinationals are accused of dodging every year.
A bowling club chairman, who declined to be identified, said: ‘It seems that if you sell coffees by the billion as Starbucks do, you will end up paying next to no tax thanks to a sweetheart deal with HMRC.
‘But if you serve up a couple of coffees at a midweek meeting, the taxman is suddenly all over you. You’re an easy target not surrounded by accountants who know all the perfectly legal tricks.’ Several cricket clubs in Scotland and England have already been investigated by HMRC, with some receiving demands for thousands of pounds in unpaid tax.
Roddy Smith, of Cricket Scotland, said: ‘I think a small number of clubs have been the subject of investigations and have had correspondences with HMRC.’ Some clubs have been told that they must pay National Insurance contributions and have been warned they could face penalties for back-tax for failing to meet PAYE deductions. Volunteers could also be landed with income tax and National Insurance bills of their own.
Sawbridgeworth Cricket Club in Hertfordshire was forced to take out a loan and to ask its 350 members to help pay a tax bill of almost £15,500.
Chairman Val Waring said it was a ‘David versus Goliath’ battle for the club.
HMRC is attempting to claw back £7billion in unpaid taxes. Meanwhile, Amazon, which had sales of £3.4billion in 2011, only paid £1.8million while Google paid £6million out of a UK turnover of £395million. Tax experts warned the bills could leave clubs facing closure. Elaine Clarke, of consultancy Cheapaccounting, said: ‘This is a tax on village life. HMRC is treating local community clubs in the same way as big business, and it’s ludicrously unfair.’
Mike Down, of accountant Baker Tilly, said: ‘Clubs could close as a result of this. If a little club is hit with a tax bill for tens of thousands of pounds, where will their members get the money from? It is hitting sport at the very grass roots.’
An HMRC spokesman said: ‘We want to ensure sports clubs operate their payroll correctly and pay the correct amount of tax. We are working with sports clubs to put things right if necessary.’