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Update from Legal

 

Music Licensing Fees & COVID-19

We understand that Clubs and RTCs may be able to apply for a discount on PPL/PRS licences for this year due to the requirement to close completely during the first lockdown of the pandemic and potentially the second lockdown and subsequent Tier 3 restrictions. You will need to contact PRS/PPL to arrange the discount by providing your dates of closure in order that it may adjust your invoice.

Waste Collection Fees

We understand that some waste collection companies are willing to suspend collections during times of forced closure which may also result in a financial saving.

Fundraising Events and VAT.

If your club is constituted as a not-for-profit charity then it may be possible to make a claim to HMRC for VAT previously declared on qualifying fundraising events held by your club during the last four years. This is likely to be bar income from such events and may also include catering and other supplies made. However, as there are "Partial Exemption" calculations and requirements that must be undertaken in order to make a claim we advise that you seek professional assistance.

The criteria to be met to enable an event to qualify for the relief scheme is that the event must be an event of the club that was principally held to raise funds for the club and/or a registered charity. Attendees should be aware it was/is held to raise funds for the club. Events held for other organisations where they let the function facility of the club do not qualify such as private weddings, birthday parties, wakes etc. Events which typically qualify include: Halloween, bonfire night, race nights, Christmas events, quiz nights, comedy nights.

Technical requirements

The key is to ensure that you are able to "convert" the qualifying events so that the income is exempt from VAT without exceeding certain limits (the Partial exemption limits) that restrict the ability of the club to recover all VAT incurred on costs. These are called Partial Exemption De minimis limits and enable the club to recover up to £7,500 exempt input tax per annum without restriction. To satisfy this test the club will need to review all VAT incurred on each purchase transaction during the last four years to quantify the VAT incurred on costs attributable to exempt activity. HMRC require an annual Partial Exemption calculation to be submitted for each VAT year with the claim and all VAT incurred in each year to be attributed to taxable, exempt or partial recovery activities. It is usually possible to claim back four years.

Information needed to calculate a claim.

In order to calculate the claim, you will need the following information:

  • annual accounts with a detailed profit and loss account for the relevant years;
  • VAT return details for each VAT accounting period to include detailed transactions for each return;
  • a list of fundraising events held by the club during the claim period to include description and all income generated (bar, catering, tickets etc.);
  • a nominal account listing (to be able to identify and attribute VAT incurred on costs);
  • a copy of the club constitution and rules.

Russell Moore VAT specialist services

Russell Moore is an independent sports VAT specialist who has acted for circa 50 sports clubs (largely rugby clubs) with claims settled in the region of £600k. He is able to provide his services to undertake all necessary tasks to collate, calculate, submit the claim and deal with any issues arising from HMRC. His costs are £100 per hour to an absolute maximum of 20% of the settled claim. No claim no fee. His contact details are: russellmoore@sportsvat.co.uk Tel: 07710 329317.

Business Interruption Insurance

The Supreme Court has confirmed that it will not be in a position to hand down the Business Interruption Insurance Test Case judgment before January 2021.

The Financial Conduct Authority (FCA) has launched a short consultation to ensure that it is in a position to issue the guidance as soon as possible once the judgment of the Supreme Court has been handed down. The FCA consultation will give guidance to help policyholders, insurers and insurance intermediaries judge how the presence of Coronavirus (Covid-19) in a particular area may be proved.

Should the Supreme Court uphold the High Court's decision that relevant policies potentially provide cover in response to the pandemic then the guidance is intended to ensure that the process of proving the presence of coronavirus is made as simple as possible for eligible policyholders and that they can receive their claim payments as early as possible.

The FCA are asking for comments on this guidance consultation by 18 January 2021.

Further information about the consultation can be found on the FCA website.

For previous RYA coverage of the Business Interruption Insurance Test Case, please click here

If you have any questions or queries relating to the above information, please get in touch with the RYA Legal team: legal@rya.org.uk or call: 023 8060 4223.