Identifying Taxation Issues

tax

Q&A with Roger Gadd from KPMG

We caught up with tax expert, Roger Gadd, Director of Private Client, Tax, from KPMG, the RPA’s Official Tax Partner, to find out more about taxation issues that may affect professional rugby players.

Tell us about some of the taxation issues that new players need to be aware of?
We receive a lot of queries involving the taxation of Image Rights and Agents’ Fees. This is a complicated area. Each player should be comfortable that they know what they are doing and have taken professional advice so that there are no nasty tax surprises.

Is there any advice for senior players to consider when planning Testimonials?
Don’t let tax be an after-thought. Make sure that you and your committee plan ahead, understand what will be subject to tax and retain funds to meet any tax liabilities that will be payable.

Is it possible for players to insure themselves against HMRC Enquiries?
HMRC have the power to ask questions into an individual’s tax affairs and in extreme cases can look back 20 years. If you receive an enquiry letter from HMRC I would suggest speaking to a tax professional who can deal with HMRC on your behalf. This could potentially not only save a lot of tax but also a lot of unwanted stress. Whilst it is not possible to avoid an enquiry or insure the tax, you can take out insurance to cover the professional costs of dealing with the enquiry.

Do you have any advice for players who may have other sources of income?
Make sure that you are clear how the income needs to be reported on your annual tax return. If you don’t complete one establish whether you need to – it is quite likely that you will need to if you have sources of income in addition to the salary from your club. Also make sure that you are aware of any expenses that can be claimed and budget for any tax due.

What if I have missed off some income on my tax return?
It’s important that tax returns are completed correctly. If you realise you have made a mistake on a return, you should let HMRC know as soon as possible.  There are different procedures to follow depending on how long after the tax year you realise you made a mistake and it might be worthwhile speaking to a tax professional.  HMRC has the power to impose interest and penalties but can offer more favourable terms when made aware of a mistake upfront.

When is the Tax Return filing deadline?
The tax payment and filing deadline is 31 January following the tax year end. The tax year ends on 5 April each year. So for the tax year ending 5 April 2013 the deadline is 31 January 2014.

What are the consequences if I do not file my tax return on time?
If a tax return is filed just 1 day late there is a penalty of £100 (even if there is no tax to pay or you have paid the tax you owe). There are further penalties if the tax return is still outstanding after 3, 6 and 12 months. Being late with your tax return can get very expensive.  Interest and penalties are also charged if you pay your tax late.

If our members wish to discuss their tax issues with KPMG, who should they contact?
They should contact me in the first instance. I or one of my colleagues will be happy to have an initial conversation about their tax position. I’m contactable on 0117 905 4636 and my email is roger.gadd@kpmg.co.uk.


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