: Thu Apr 02, 2009 9:20 pm  

But the basic point must be right, as if the Revenue declare that the payment made to the player was "net", then the club, which has declared the net figure as if it were a gross figure, is as Adey says immediately in breach of the salary cap.

Because (using a notional tax/NI rate of 40% for easy illustration) if the payment actually made to the player was £60,000

and if the club declared £60,000 on the salary cap

but Revenue now says "no, if he got £60K that is net of tax/NI, Dear Club, where's the £40K tax and NI that you deducted, or should have deducted?"

... the effect is that the player actually got a payment of £100K, less tax / NI, which the club didn't - but should have - paid the Revenue.

The club's ignorance - perhaps having been advised by some accountant that the wheeze would work - might be taken into account as a mitigating factor by the RFL, but that's all. It would be no defence to a salary cap breach.

The reason though why I can't see the RFL doing anything about it is if it does involve 2/3rds of all SL clubs, they will be scared of the repercussions and will simply fudge and bottle it.

: Thu Apr 02, 2009 9:26 pm  

Ferocious Aardvark wrote:

The reason though why I can't see the RFL doing anything about it is if it does involve 2/3rds of all SL clubs, they will be scared of the repercussions and will simply fudge and bottle it.

As I have said in another place. And especially if it transpired that one of the clubs was Leeds.

: Thu Apr 02, 2009 9:29 pm  

As much as the RFL won't do anything you can be damn sure that HMRC will.

If they can get the clubs for this cash, they will.

Interesting times lay ahead - granted it won't probably affect Leeds, Wire and Wigan as they've got a few quid but Saints might be found wanting......

Cut price sale, all offers welcome?

: Thu Apr 02, 2009 10:33 pm  

Ferocious Aardvark wrote:

The reason though why I can't see the RFL doing anything about it is if it does involve 2/3rds of all SL clubs, they will be scared of the repercussions and will simply fudge and bottle it.

Good point but the rules are the rules, if some clubs haven't done this why should they effectively be punished for not taking advantage over the years?

The clubs involved have benefited from this and as a consequence should feel the pain. You take a calculated risk when you do something like this, in this case it may have gone wrong.

I'm now praying it isn't us

: Thu Apr 02, 2009 11:16 pm  

A rider to all this - my understanding is that HMRC are pursuing this as tax evasion. The Grauniad article certainly alludes to this, with e.g. the comment "...and there are suggestions that they may be forced to make retrospective payments which in a couple of cases could run well into six figures."

However, if in the event all we end up with is it being judged to be merely avoidance, with loopholes being closed, then it won't affect the past and there will be no salary cap breaches. The only issue then is what do the affected clubs do going forward, and what do they do if they are contractually committed to making net payments that they can no longer make within the cap?

: Fri Apr 03, 2009 5:15 am  

That's really interesting. I can't see the RFL applying it retrospectively. How could they possibly enforce it if it meant clubs effectively breached the cap in the last few years? Retrospective points deductions? It's not going to happen is it?

: Fri Apr 03, 2009 6:48 am  

No I don't think you can apply previously, I do think that if they are found guilty of tax evasion that the bit they haven't paid this year, is added to what they've claimed the cap is at and points deducted appropriatly.

: Fri Apr 03, 2009 7:19 am  

Northern Lad wrote:

No I don't think you can apply previously, I do think that if they are found guilty of tax evasion that the bit they haven't paid this year, is added to what they've claimed the cap is at and points deducted appropriatly.

I think the RFL can do what they like! They usually do.

: Fri Apr 03, 2009 7:31 am  

Northern Lad wrote:

No I don't think you can apply previously, I do think that if they are found guilty of tax evasion that the bit they haven't paid this year, is added to what they've claimed the cap is at and points deducted appropriatly.

I doubt the RFL would re-open prior years, although to not do so would surely lead to serious challenge by clubs who felt others had "cheated" and got away with it. But, in answer, those clubs would say that they made full and frank disclosure of what they paid to the salary cap auditor so if he was happy then he can't be unhappy now.

I'll reserve judgment anyway until we see what comes out of all this and which clubs are implicated. I'll admit though that I will be absolutely sickened if it transpires that we were not involved, it proves to have indeed been evasion and therefore cheating on the cap by the clubs involved, but no action is taken - after what happened to us and all the vicious vitriol we were on the end of.

: Fri Apr 03, 2009 7:32 am  

Even if 10 other teams get deducted pts we`d still finish season bottom.