Referee and Tax

[OldNavyRef]

Good day all.

I am new to this referee malarky. I am also a tax payer. I searched the forum using the word 'tax' and got no results, hence the post.

What are the gentlemen or gentlewomen who pay tax on their day job doing with their referee earnings. I thought it was just spare change but I ended up earning approx 300 a month from reffing.

I hope this subject isn't taboo hahaa!

 

[JamesL]

Everyone has differing opinions.
However, factually, if you receive more than £1000 per annum (Gross) then it should be declared to HMRC.

 

[Ben448844]

I'm spending mine on Winter holidays in the Canaries. Putting this politely, I do not paybtax on refereeing earning and I won't be. Theres lots of claimable expenses etc if we go down the self assessment route and there'd be hardly any tax to pay and a lot of effort to go through. Each to their own

 

[Trip]

It seems to be a sort of gentlemen's agreement that HMRC turn a blind eye to referee earnings. Strictly speaking it's taxable like any other earning.

Your match fee is intended to cover your expenses. Of course since much of your outgoings are fixed (eg. kit) whether you end up with a profit depends on how many games you do. The additional time it would take me to record all my expenses (especially travel) at my standard day rate would mean I'd be better off not accepting any money for games.

 

[lincs22]

Everyone has differing opinions.
However, factually, if you receive more than £1000 per annum (Gross) then it should be declared to HMRC.

Technically, any casual earnings have to be declared to HMRC, if you have any reason to submit a Income Tax Return. You then have 2 options: clain the £1,000 trading deduction or the actual expenses incurred.

Answer is you won't have enough earnings to pay tax on.

It seems to be a sort of gentlemen's agreement that HMRC turn a blind eye to referee earnings. Strictly speaking it's taxable like any other earning.

Your match fee is intended to cover your expenses. Of course since much of your outgoings are fixed (eg. kit) whether you end up with a profit depends on how many games you do. The additional time it would take me to record all my expenses (especially travel) at my standard day rate would mean I'd be better off not accepting any money for games.

HMRC only get involved when the sums involved at higher. This use to be when you become a Panel (L2) referee, as the fees became significant. this also used to be the level that the earnt a wage which was paid though the club's payroll. I am not sure where the new line for clubs and wages are drawn, but HMRC will not get involved until you are a long way up the pyramid.

@OldNavyRef - I wouldn't worry about this while you are starting off.

 

[JamesL]

Technically, any casual earnings have to be declared to HMRC, if you have any reason to submit a Income Tax Return. You then have 2 options: clain the £1,000 trading deduction or the actual expenses incurred.

Answer is you won't have enough earnings to pay tax on.

HMRC only get involved when the sums involved at higher. This use to be when you become a Panel (L2) referee, as the fees became significant. this also used to be the level that the earnt a wage which was paid though the club's payroll. I am not sure where the new line for clubs and wages are drawn, but HMRC will not get involved until you are a long way up the pyramid.

@OldNavyRef - I wouldn't worry about this while you are starting off.

Yes, that's what I said. "any monies".

2 counterpoints is that 1) it is very easy to accumulate £1000, particularly those refs that do multiple games a weekend. Especially now as fees in many areas have significantly increased. Those refs doing 3 games a weekend will be getting close to £100 (some might exceed esp L4 and above).. And not to teach anyone to suck eggs but that would only take 10 weeks to be close to or over the threshold.

2) if you make a loss, then that can be offset against your employment income and you can claim your tax back.

The tax I pay is minimal. Don't think I've ever owed more than 150 quid in tax at the end of the year.

What I always say to anyone is it is your own decision whether or not you wish to declare your earnings, but whatever you do, keep a record. Whilst very doubtful they will, if HMRC do wake up one day and decide to look into money received through refereeing what you don't want is an estimation.

 

[Redster]

In the convict realm it is income derived from a hobby and thus is not assessable. Of course, this is only useful to you if there is some comparable provision in the mother country's income tax laws.

 

[Taity78]

The Tax man takes enough from me in my day job.. the game I do on a saturday pays for the chippy tea we have

 

[CaptainsPlease]

The tax is straightforward to work out. If you earn over £1,000 (gross) from refereeing in a tax year then you must register for self assessment and declare the total to HMRC in the tax return. You can then simply choose to deduct from the amount you are taxed on either the £1,000 trading allowance (simplest), or your actual expenses.

Anyone who is earning over £1,000 per tax year from refereeing and not declaring to HMRC is illegally evading tax. There is no way that the actual deductible expenses per match amount to the same as an average match fee.

Anyone who doesn't want the admin should limit their income from refereeing (and all self-employment) to £1,000 or less, then there is no obligation to declare.

 

[Kent Ref]

The tax is straightforward to work out. If you earn over £1,000 (gross) from refereeing in a tax year then you must register for self assessment and declare the total to HMRC in the tax return. You can then simply choose to deduct from the amount you are taxed on either the £1,000 trading allowance (simplest), or your actual expenses.

Anyone who is earning over £1,000 per tax year from refereeing and not declaring to HMRC is illegally evading tax. There is no way that the actual deductible expenses per match amount to the same as an average match fee.

Anyone who doesn't want the admin should limit their income from refereeing (and all self-employment) to £1,000 or less, then there is no obligation to declare.

And then you get the long list of things to offset any tax liability:

Gym membership
Mobile phone contract
Broadband expenses
Kit Purchase and accessories
Laundry
Petrol
Car expenses.
County FA / RA costs
DBS costs

I once got my accountant to work out a notional figure for me and it would have been around £100 to pay (about 4 years ago) i would have paid that season (after deductibles).

I ref Sat and Sunday each week locally.

So on that basis a ref doing two local games would pay very little, if any.

 

[JamesL]

And then you get the long list of things to offset any tax liability:

Gym membership
Mobile phone contract
Broadband expenses
Kit Purchase and accessories
Laundry
Petrol
Car expenses.
County FA / RA costs
DBS costs

I once got my accountant to work out a notional figure for me and it would have been around £100 to pay (about 4 years ago) i would have paid that season (after deductibles).

I ref Sat and Sunday each week locally.

So on that basis a ref doing two local games would pay very little, if any.

Think you'd struggle for gym membership, mobile phone, and broadband as you would have those if you were a referee or not and would probably cost the same and so are probably not deductible. You could potentially get away with it, you might argue you only go to the gym to keep up refereeing fitness, but I'm not sure that would stand up. Generally speaking if your personal mobile bill is £29.50... and you have unlimited calls and a set amount of data then this is not a business expense, unless going over your data due to your business activity incurred you extra cost for example. If you were paying per min for your calls that would be different, you could then claim the cost of calls associated with refereeing.
The cost of electric is next to nothing, for example I do my admin on my phone, which would be charged all the same, in a room lit in the same way as it would be if I were not doing my refereeing admin, in a room heated to the same temperature. Therefore there is no business cost to that activity that can be deducted.

I'll keep coming back to the hardly pay anything if any argument... If you end up at making a loss then you can offset your paye income and get a rebate.

 

[CaptainsPlease]

And then you get the long list of things to offset any tax liability:

Gym membership
Mobile phone contract
Broadband expenses
Kit Purchase and accessories
Laundry
Petrol
Car expenses.
County FA / RA costs
DBS costs

I once got my accountant to work out a notional figure for me and it would have been around £100 to pay (about 4 years ago) i would have paid that season (after deductibles).

I ref Sat and Sunday each week locally.

So on that basis a ref doing two local games would pay very little, if any.

To add to the above by JamesL if these are local games then there is not going to be much on vehicle expenses (assuming simplified expenses at 45p per mile minus any mileage allowance you've been paid for the game).

Laundry is going to be less than £1 per game if you can even work it out accurately (flat rate laundry allowances do not apply to the self-employed).

For most referees, unless doing a lot of mileage and buying a lot of expensive kit, deducting the £1000 trading allowance is probably going to be the better option rather than tracking expenses.

 

[Kent Ref]

To add to the above by JamesL if these are local games then there is not going to be much on vehicle expenses (assuming simplified expenses at 45p per mile minus any mileage allowance you've been paid for the game).

Laundry is going to be less than £1 per game if you can even work it out accurately (flat rate laundry allowances do not apply to the self-employed).

RA costs cannot be deducted, as these are not mandatory to referee and the RA is also not an HMRC-approved professional body.

For most referees, unless doing a lot of mileage and buying a lot of expensive kit, deducting the £1000 trading allowance is probably going to be the better option rather than tracking expenses.

I am telling you what the accountant told me i can claim for. He's a clever guy and knows exactly how to work the receipts.

Any service that enhances your ability to referee is also deductible.

My dad was a cab driver and the list of what he could claim for was a lot longer than this!

For me local can be up to 25 miles each way (50 per game - possibly). That would be £22.50 of a match fee already covered.

This is definitely "small beer" for a 2 games a week ref.

 

[CaptainsPlease]

I am telling you what the accountant told me i can claim for. He's a clever guy and knows exactly how to work the receipts.

Any service that enhances your ability to referee is also deductible.

My dad was a cab driver and the list of what he could claim for was a lot longer than this!

For me local can be up to 25 miles each way (50 per game - possibly). That would be £22.50 of a match fee already covered.

This is definitely "small beer" for a 2 games a week ref.

Your expenses may be higher than usual then and make it worth keeping records and proof. Of course it is still obligatory to declare to HMRC if you are topping £1,000 of refereeing/self-employment income before expenses.

 

[Churchman]

It is wrong not to pay tax on taxable income. However, many years back when i was in Exeter the HMRC came calling on one ref. he got another ref(an accountant) to help him sort things out, and the HMRC were left owing him money. They didn't visit Devon again in a hurry. However, the only way to ensure you are ok is to keep clear records of travel expenses, kit expenses, and so on - then if there is a challenge you can justify yourself, and if you see a significant surplus you can report it.

 

[RustyRef]

As someone who last year got a notice to start completing a self assessment I was pleased I had kept a record of all football related income as I had to declare it. I've barely been active over the past 12 months so it was easy and very limited impact, but would have been a lot more difficult in previous seasons, especially when I was in the "system".

As my situation was complicated, covering two employers and a redundancy payment much of which went into a DB pension, I had to take specialist tax guidance so I asked him about refereeing. He was very clear that you can only claim for things that you wouldn't have to pay for if you weren't refereeing. Some things are obvious ...

Kit
Boots
Petrol / car expenses, but for games you have been paid expenses you can only claim the delta between the mileage fee and the HMRC max.
DBS costs
Annual registration
Society membership

Other things are a lot less clear. Things like gym membership, mobile phone and broadband, you would have to prove that you only have those contracts because of your refereeing. That is nigh on impossible, and the best you could hope for is claiming a percentage based on the amount of time you used those services for refereeing compared to other activities. If you work from home, and especially if you claimed the work from home allowance during Covid years, you would be on an extremely sticky wicket claiming 100% of your broadband bill was needed for refereeing.

 

[captainwinsor]

Sounds like you paid in cash over there. It was like that here before Covid but I heard that parents were keeping the cash if a ref didn’t show so now they use E pay and I get a tax form. Only the higher level leagues still pay cash.

 

[lincs22]

And then you get the long list of things to offset any tax liability:

Gym membership
Mobile phone contract
Broadband expenses
Kit Purchase and accessories
Laundry
Petrol
Car expenses.
County FA / RA costs
DBS costs

I once got my accountant to work out a notional figure for me and it would have been around £100 to pay (about 4 years ago) i would have paid that season (after deductibles).

I ref Sat and Sunday each week locally.

So on that basis a ref doing two local games would pay very little, if any.

As someone who last year got a notice to start completing a self assessment I was pleased I had kept a record of all football related income as I had to declare it. I've barely been active over the past 12 months so it was easy and very limited impact, but would have been a lot more difficult in previous seasons, especially when I was in the "system".

As my situation was complicated, covering two employers and a redundancy payment much of which went into a DB pension, I had to take specialist tax guidance so I asked him about refereeing. He was very clear that you can only claim for things that you wouldn't have to pay for if you weren't refereeing. Some things are obvious ...

Kit
Boots
Petrol / car expenses, but for games you have been paid expenses you can only claim the delta between the mileage fee and the HMRC max.
DBS costs
Annual registration
Society membership

Other things are a lot less clear. Things like gym membership, mobile phone and broadband, you would have to prove that you only have those contracts because of your refereeing. That is nigh on impossible, and the best you could hope for is claiming a percentage based on the amount of time you used those services for refereeing compared to other activities. If you work from home, and especially if you claimed the work from home allowance during Covid years, you would be on an extremely sticky wicket claiming 100% of your broadband bill was needed for refereeing.

This is getting confusing.... My job is a Chartered Accountant dealing with people's personal tax affairs, so....

The first point is that refereeing income is treated as a "self-employment", not an employment. So, the test whether an expense is allowable is "wholly and necessarily". For employment income deductions, you have to add "exclusively" in as well. Gym membership would fail under this test.

So, RA membership is allowable under these rules. Also, any mileage for refereeing matters - to an RA meeting, training evening, etc is eligible. You should be also able to claim a % of your mobile phone bill (based on usage), as it is partly used for refereeing

And for more allowable costs, you could claim for going to watch at match at your level or just above as a learning experience...

HMRC enquires into your refereeing income are very rare, as they have better recovery jobs to investigate.

 

[JamesL]

This is getting confusing.... My job is a Chartered Accountant dealing with people's personal tax affairs, so....

The first point is that refereeing income is treated as a "self-employment", not an employment. So, the test whether an expense is allowable is "wholly and necessarily". For employment income deductions, you have to add "exclusively" in as well. Gym membership would fail under this test.

So, RA membership is allowable under these rules. Also, any mileage for refereeing matters - to an RA meeting, training evening, etc is eligible. You should be also able to claim a % of your mobile phone bill (based on usage), as it is partly used for refereeing

And for more allowable costs, you could claim for going to watch at match at your level or just above as a learning experience...

HMRC enquires into your refereeing income are very rare, as they have better recovery jobs to investigate.

Am I right in thinking by usage we are talking additional costs that can be exclusively contributed to refereeing over and above the contractual subscription?
So if you pay for 5 GB unlimited mins and text and you don't exceed this then the cost would be the same either way and therefore not an allowable expense?

 

[lincs22]

Am I right in thinking by usage we are talking additional costs that can be exclusively contributed to refereeing over and above the contractual subscription?
So if you pay for 5 GB unlimited mins and text and you don't exceed this then the cost would be the same either way and therefore not an allowable expense?

If you could survive on a 2GB usage for your personal usage, then you need the 5GB to cover the extra for the refereeing usage, then some of the upgrade amount would be an allowable deduction.