: Thu Apr 02, 2009 9:50 pm  

tvoc wrote:

Are you just covering your arse here?

aye, but the RFL are supporting the clubs on the matter so all should be well on that front.

: Thu Apr 02, 2009 9:53 pm  

Adeybull wrote:

Sorry Gareth but you have missed the key point here.

If (and I stress if) clubs are found by HMRC to have made payments to players free of (or at reduced rates of) tax or NIC, and IF it is determined that tax and NIC has been underdeducted and paid as a result, THEN the clubs will be required to account for that tax - plus interest and penalties - to HMRC. Likely going back six years.

That's bad enough.

But the really interesting issue is the effect on compliance with the salary cap. Because its the grossed-up amounts that would rank under the cap, not the net amounts actually paid. Which for clubs involved could well mean an immediate and retrospective salary cap breach for anything up to six years.

Its all hypothetical at this stage, as no-one has yet admitted to having had to settle with HMRC over this issue, but it does seem to be widely understood that HMRC HAVE been investigating these practices and that such practices HAVE been taking place.

The response of the RFL regarding retrospective SC breaches should it transpire that clubs DO have to settle with HMRC will be...interesting.

I appreciate that, but it's my understanding that the clubs haven't done anything illegal so any retrospective payments that took them over the cap for a given year shouldn't cause any action to be taken. However, I'm more than happy for someone with more knowledge of accountancy / economics to put me straight.

: Thu Apr 02, 2009 9:54 pm  

I'd of thought the salary cap went on the net figure paid by the club to their players. As the players dont see the nic & paye. Also some players could fall into being higher rate tax payers and the clubs in question may have to raise their gross pay so it works out the same as other players' net pay.

: Thu Apr 02, 2009 9:58 pm  

Dirty Pretty Thing wrote:

I appreciate that, but it's my understanding that the clubs haven't done anything illegal so any retrospective payments that took them over the cap for a given year shouldn't cause any action to be taken. However, I'm more than happy for someone with more knowledge of accountancy / economics to put me straight.

Not relevant whether its illegal, just whether the amounts paid to.on behalf of players complied with the cap. If it transpires that club thought to be within the cap for a given year is now found to have exceeded it, the RFL will HAVE to treat that as a discovery of a breach and re-open the SC review for that year, surely?

Otherwise, clubs which complied with the cap - or were caught by other technical breaches and punished accordingly - will surely raise a challenge, and they and their fans will accuse the other club/s of cheating. Like you guys did to at least one other club in the past, in fact?

: Thu Apr 02, 2009 9:59 pm  

kendall17 wrote:

I'd of thought the salary cap went on the net figure paid by the club to their players. As the players dont see the nic & paye. Also some players could fall into being higher rate tax payers and the clubs in question may have to raise their gross pay so it works out the same as other players' net pay.

Wrong. Its the gross pay. Check it out in the detailed SC rules - link on the RFL site last time I looked, and I have a copy on my PC.

: Thu Apr 02, 2009 10:09 pm  

Adeybull wrote:

Wrong. Its the gross pay. Check it out in the detailed SC rules - link on the RFL site last time I looked, and I have a copy on my PC.

The Gross pay will be the same though surely as it was tax saving exercise for the players.

: Thu Apr 02, 2009 10:18 pm  

Well i'm sure it will all come out sooner or later and if this "loophole" is proved to have been used and used wrongly then the offender's will have to pay the money back.
How this can be deemed a SC breach i don't know because the wage will still of had to be "declared" to the rfl.

: Thu Apr 02, 2009 10:21 pm  

Adeybull wrote:

Not relevant whether its illegal, just whether the amounts paid to.on behalf of players complied with the cap. If it transpires that club thought to be within the cap for a given year is now found to have exceeded it, the RFL will HAVE to treat that as a discovery of a breach and re-open the SC review for that year, surely?

Otherwise, clubs which complied with the cap - or were caught by other technical breaches and punished accordingly - will surely raise a challenge, and they and their fans will accuse the other club/s of cheating. Like you guys did to at least one other club in the past, in fact?

If they were entitled to pay tax then yes its fair enough to retrospectively review the SC. But if its something that has been brought in and then backdated then surely a club cannot be charged with anything.

FWIW I do believe that the Bulls were harshly treated over the Hape issue.

: Thu Apr 02, 2009 10:23 pm  

rhinoms wrote:

Well i'm sure it will all come out sooner or later and if this "loophole" is proved to have been used and used wrongly then the offender's will have to pay the money back.
How this can be deemed a SC breach i don't know because the wage will still of had to be "declared" to the rfl.

Surely if it's a loophole that is being closed means that it is a legal payment that the government is now stopping. If it was illegal it would be tax evasion and would be much more problematic.

: Thu Apr 02, 2009 10:28 pm  

expatrhino wrote:

The Gross pay will be the same though surely as it was tax saving exercise for the players.

No - the whole point was to save money for the CLUB. Because it meant that it cost you less to get a given amount to a player. The tax saving for the player meant the club could pay that player less (gross) than would otherwise be the case, and therefore get more bang for their bucks. Leaving more salary cap free to spend elsewhere.