National Insurance and CASC update 

Update from the RYA Legal Team

National Insurance Contributions

We are pleased to report that the Government has approved the National Insurance Contributions (NIC) Parliamentary Bill (now the National Insurance Contributions Act 2014). 

 If you are a business/charity/CASC (incorporated or unincorporated) that pays employer Class 1 NICs on your employees’ or directors’ earnings, you can now claim the Employment Allowance (as of 06 April)

This means clubs that employ people are exempt from the first £2,000 of their Employers National Insurance bill.  Both employer and employee pay NIC dependent on the level of salary; the exemption is for employers only (employees National Insurance is unaffected).  This will make it cheaper to employ people and may save clubs that employ people up to a maximum of £2,000 a year.

Indeed, a small club that employs one individual part time on a modest salary is likely to be totally exempt from NIC since it will not exceed the £2,000 threshold.

The Act extends to England, Wales, Scotland and Northern Ireland. For more information click here

CASC Update

As readers of Club Room are aware, the Government reviewed the CASC scheme last year.  As a result it felt that some of the original legislation was unclear and therefore introduced new eligibility conditions for CASC within the Finance Act 2013.

It also put together a series of proposals which were put to public consultation last summer.

You can read our detailed analysis of the proposals in the previous July and December edition of Clubroom

Lack of Understanding

RYA Legal Advisor Mandy Peters attended the working group meetings organised by HMRC to discuss the detail of the proposals.

It was apparent from these meetings that HMRC did not have a comprehensive understanding of the operation of sport.

The RYA has therefore provided input on specific areas in order to try and ensure that HMRC fully understand how sailing clubs operate in order that its Detailed Guidance sets out, as clearly as possible, the effect of the new rules on our clubs.

 It is true to say that the meetings raised more questions than answers!  HMRC is therefore considering some of the key issues raised by all the sports in attendance, which we hope will be taken into account when the Detailed Guidance is finally published.

Timescale - Adjustment:

HMRC originally advised that the new Regulations would be laid before Parliament early in 2014 preceded by a short technical consultation.

We were not hopeful that this deadline would be met and indeed it has not.  HMRC is now indicating that the Regulations should be laid before Parliament before the summer recess.

HMRC’s new Detailed Guidance will be published as soon as possible after the Regulations are approved by Parliament.  HMRC are in the process of writing to clubs which they believe may not, at present, be able to meet the conditions of the revised scheme.

If you happen to be one of those clubs, we would urge you to contact Mandy Peters from the Legal Team to discuss the issues and look at your options (mandy.peters@rya.org.uk  Tel: 023 8060 4225).

There will be a 12 month amnesty (HMRC originally intended this to start when the Regulations come into force, however, we have argued that this should start when the Detailed Guidance is published, particularly as there may well be a delay between the publishing of the Regulations and the publishing of the Detailed Guidance) during which time clubs that are unable to meet the conditions of the revised scheme will be able to de-register without penalty.

HMRC have stated that they will start to process those applications which have been on hold pending the outcome of the consultation in accordance with the new rules insofar as possible.  New applications will likewise be processed in accordance with the new rules.

Recommended Action:

Existing CASCs need to carefully consider whether they are likely to be able to meet the revised conditions of the Scheme.

We would encourage all CASCs to contact Mandy Peters to discuss how the revised conditions are likely to affect them.  HMRC’s Detailed Guidance will be instrumental to understanding the implications for clubs and unfortunately this is not likely to be available until late 2014.

However, the sooner clubs start considering whether the changes will present issues for them, the more time we will have to think about potential solutions.