Revealed: What the Taxman wants from the GAA
Exclusive: Martin Breheny outlines how a detailed memo from Croke Park could have major implications on how counties conduct their future financial affairs
WHILE the row over expense payments to referees has been diffused for the present, tax issues could emerge on a much larger scale for the GAA, arising from discussions between Croke Park and the Revenue Commissioners.
The GAA sought a hurried return to negotiations with Revenue on Tuesday after Longford referees called a strike in protest against a new payment arrangement, involving a meal payment of €13.71, plus a car allowance of 50c per mile. Under the existing arrangement, referees were paid a flat fee.
Wexford referees threatened to walk out too, while it was expected that similar strikes would have spread rapidly over the coming weeks.
The GAA are now to re-engage with Revenue in an effort to strike a deal that will satisfy referees and avoid a possible shutdown of the club scene throughout the country.
Croke Park had already notified counties about the changed requirements for referee payments, even supplying sample claim forms, and were taken aback by the reaction from referees.
Tom Ryan, national finance director, Kathy Slattery, national finance manager and Lauri Quinn, national finance management committee chairman, are currently conducting a tour of the country explaining the income tax implications of various aspects of GAA activity.
This follows meetings between the GAA and Revenue in recent months to clarify various issues that have been of concern for quite some time. Revenue have advised the GAA that they will be visiting various units this year to review their tax affairs.
Croke Park has issued counties with a memo, covering a whole range of areas where tax issues may arise and advising how to address them.
The document, which has been seen by the Irish Independent, covers a broad spectrum, including expenses, payments to stewards, foreign trips, courtesy cars, gym membership and clothing.
While the referees' expenses issue is back for renegotiation, the others are not and will have to be implemented if counties and clubs are to be fully tax compliant.
It all comes against a background where the GAA are about to embark on the latest crackdown on illegal payments to managers at county and club level.
Counties have backed the proposal to rigorously enforce the current rules on amateur status and it now remains to be seen how Croke Park goes about applying it.
The matter will be discussed at a Management Committee meeting next week and formal proposals will be put to the counties over the next few months.
INCOME TAX AND THE GAA: WHAT CROKE PARK HAS TOLD THE COUNTIES
PAYMENTS TO MANAGERS, PLAYERS, OFFICIALS, REFEREES
"The Association does not allow payments under our amateur status, but Revenue have also outlined that the following items are taxable:
- Salary, wages, expenses, bonuses, grants, honoraria, perquisites, benefits, etc.
- Inducement payments
- 'Round Sum' expenses payments (for example €X per training sessions)
- Payment in respect of a potential loss of occupational or other earnings (eg monies to compensate for an individual's absence from his/her occupation)
- Payments of bills on behalf of individuals.
"However, set out below (expenses) are the circumstances under which Revenue are prepared to allow tax-free reimbursement of expenses to managers, management teams, players, officials, etc."
"It is a long-established principle of tax case law that expenses incurred in travelling from home-to-work-to-home are expenses which are not necessarily incurred in the performance of the duties of players, managers and the reimbursement of such expenses is taxable and subject to PAYE.
"Revenue are prepared to accept that the reimbursement of expenses for travelling and subsistence to individuals involved in GAA games may be paid tax-free, provided that such reimbursement is:
(a): The only payment made to the individuals.
(b): Merely puts the individuals in a position to attend training, games or meetings.
(c): No more than reimburses the individuals the expenses actually incurred and do not exceed what are known as civil service rates for expenses (travel and subsistence).
(d): Meals provided after training -- a taxable benefit does not arise. However, subsistence expenses should not be paid free of tax in such circumstances."
PAYMENT TO CASUAL EMPLOYEES
(stewards, stiles personnel, ticket sellers, etc)
"Payments to casual employees at games are taxable and the appropriate deductions should be made under the PAYE system.
"Where the name and PPS number of the casual employee is provided, Revenue are prepared to accept that, for ease of administration, tax at an agreed rate of 28.5pc can be used."
CAR PROVIDED BY THE GAA OR A SPONSOR
"Where a car is provided by the GAA to individuals and is available for the private use of the individual, a taxable benefit arises.
"The person who provides the car must account (under the PAYE system) for the tax, PRSI and USC on the notional income amount of the benefit provided."
"Where a foreign trip is part of a training camp schedule or tied to a promotional game, Revenue are prepared to accept that no charge to tax arises. However, this tax treatment is not available in respect of trips where individuals may receive payment in lieu of participating in such a trip (ie, the cost of provision of the trip in lieu is taxable).
GYM SUBSCRIPTIONS FOR PLAYERS
"Revenue are prepared to accept that a charge to tax will not arise where gym subscriptions are paid on behalf of players who are required to maintain levels of fitness as an integral part of a team-training regime."
"Revenue are prepared to accept that the provision of team/club/county clothing and sports gear to players at reasonable cost will not give rise to a charge to tax."