We had a telephone call this week from a concerned head coach at a swimming club whose club had attended one of our tax workshops, at which we outline the different ways a club and coach can work together in a truly self-employment relationship.
Many of the swimming clubs we get called in to visit would certainly struggle to prove that their self-employed coaches are truly self-employed, due to the very nature of the way that many of the clubs structure their coaching programme. HMRC have the power to declare such a relationship as one of employment if it does not pass the guidelines and can then impose back tax demands, penalties and interest on the club.
The club where the coach who called us works want to ensure their coaches are truly self-employed and have decided to require their head coach to assume the responsibilities for the programme and its staffing, i.e. demonstrate that the coach has ‘ownership’ of the programme and thereby determines the programme content, structure and has responsibility for the staffing of the programme, including payment of the other coaches.
It is the last point – responsibility for staffing – that is causing a real issue for the coach, in that he does not want to do this and has no experience of management at this level. So what alternatives do the club and coach have in these circumstances if the coach is either unable or unwilling to take control of the programme? We would suggest three alternatives for both club and coach to consider to ensure both parties are in a self-employment relationship but both are happy with their respective roles:
- Pass the self-employment guidelines through substitution – ensure the coaches can and do substitute during the season, ensuring that payments made for substituted sessions are paid to the contracted coach and NOT the substitute. This is the most common solution we see adopted by swimming clubs and is very common in other sports.
- Pass the self-employment guidelines through financial risk – charge the coaches an administration fee for coaching at the club, which must be set at a ‘reasonable’ level and should be charged whether the coach works or not. In practice, this is a difficult solution to implement and control for swimming but is very common in sports such as tennis (David Lloyd centres for example charge their coaches a fee and also require them to provide seven free hours of their time each week).
- Employ the coach – pay all the coaches as employees/casual workers through a payroll service and provide training for coaches with management responsibilities. There are an increasing number of clubs who are deciding to bite the bullet and employ their team, the main disadvantage of this being the considerable administration burden that this entails.
There are a number of coaches who do take on the head coach role described and relish the opportunity to run their own team from an administrative perspective but it is something that will be very much down to the skills and inclination of the individual. It would certainly not be a good solution for a part-time head coach because they would not be able to justify the administrative time required.
As we reiterate on our workshop, we strongly recommend that both coach and club work together on this if they want to work in a truly self-employed relationship and want to ensure there won’t be issues for both parties should the relationship be scrutinised by the tax authorities and/or an employment tribunal.
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GBSport members can contact us on 01952 201657 for specific telephone and email advice and support on this and any other business matter.