A Labour Football follower has provided the following views, and technical employment advice, on how we would implement a Players Community Fund as advocated by Labour Friends of Football. This author has asked to remain anonymous.
What are your views please? And we would like to hear your alternatives on how we get players to do this?
Feel free to comment below, or tweet or e-mail us.
Andrew Pope (Chair)
On Behalf of Labour Friends of Football
A Fair Distribution Nationally or Pure Localism?
First of all, local charities are a good idea, but don’t forget the Football Foundation is a national charity and may be able to spread funds more evenly. Otherwise you could end up with charities in the London area getting far more than the rest of the country because of the sheer numbers of clubs and players, and Manchester might also be a bit skewed by the alleged amounts players at City are paid and may wish to pay into a local charity up there.
How Do We Get Players To Put Their Hands in Their Pockets?
You can’t have a deduction from wages which has not been authorised by the employee unless it is statutorily required. Even David Crausby MP’s call for funding (EDM 1245) stops short of getting it from the players. Part II of the Employment Rights Act 1996 gives the legal background for deductions from wages and protection of an employee’s entitlement.
So – there are several existing ways to make donations to charities and get tax relief for them. Here are some…
The employer has to have a scheme set up. The employee agrees to make payments through the scheme and these are made before the calculation of income tax. Effectively the employee gets all the tax relief but it does mean that he or she may be able to donate a larger amount. Because tax relief is given at source, the employee gets relief at his or her highest rate of tax.
A gift is made and the charity gets the tax relief at the basic rate. This means that the amount donated is a net amount but where the employee is a higher or additional rate taxpayer, the employee will be able to get the balance of the relief due through the self assessment process.
Tax relief is only available to taxpayers. It is limited to the amount of tax paid by the taxpayer although there are rules which allow unused relief from earlier years to be claimed. In the case of footballers this isn’t going to be a problem!
If an employee waives entitlement to wages in order to have the amount paid into a charity then he or she isn’t making the donation but the employer is. I don’t know enough about the corporation tax side of things but most football clubs don’t make profits and in that case the charity would not be able to benefit from the tax relief (there wouldn’t be any).
Finally, in the 2014 Budget, limited exemptions were introduced for bonuses paid to employees by companies owned by employee ownership trusts and recommended medical treatment. In each case the exemption does not apply if it is linked to a salary sacrifice scheme. I think that is possibly the way exemptions are going now. If the proposed general expenses exemption, to replace the current system of deductions from earnings, is brought in without that restriction I would be very surprised. It would leave the whole system wide open to abuse by employers trying to con their workers into believing that it is the employees who will benefit.