COMMUNICATION TO THE GAME
PAYMENT OF PLAYERS PROPOSALS
PURPOSE OF PAPER
1.
This paper sets out the RFU’s proposals in respect of regulating the payment of
players in the game in England. The purpose of this paper is to enable clubs to
have sight of the principles agreed by the RFU Council together with the detail of
how such principles will be implemented in the game.
2. The principles were already agreed by the RFU Council in its October 2o16
meeting and the regulation changes required to implement such principles will
be presented for approval at the RFU Council meeting in April 2017.
3. If agreed by the RFU Council, the regulations changes will come into effect in the
2018-19 season.
4. Clubs are requested to consider the content of this paper and feedback
comments to their RFU Council representatives.
BACKGROUND
5.
In the October 2016 Council meeting, Council agreed to the principles set out in the October
Payment of Players paper which can be summarised as follows:
a) The RFU makes a clear statement that it believes payments for playing Rugby in the
community game are having a detrimental effect on the game, the statement being:
“The RFU has determined that payments for playing Rugby in the Community Game
are having a detrimental effect on the ethos of the game and the development of
some clubs. Consequently it believes that there should be no payments for playing at
Level 6 and below (apart for an element towards 1 player coach), with a guideline
range for paying players between levels 3 and 5, and associated measures for those
who choose to pay more than the guideline amounts and who choose to pay
anything at Level 6 and below”
b) Guidance amounts to be set for maximum payments at Levels 3, 4 and 5 with
payments at Level 6 and below at zero (with the exception of one player coach)
c) Clubs will be free to exceed the maximum payments at Levels 3 to 5 and to still pay
players at level 6 and below however in doing so will render them ineligible for RFU
financial support
d) Clubs will be required to submit an accurate completed annual declaration stating
whether they make payments to players and if so to what extent. This will need to be
signed by four key officers from the club as stipulated in the declaration.
6. Council also agreed that an implementation working group should be set up to work up the
more detailed proposals and CGB therefore established a Payment of Players Focus Group to
finalise the detail on the payment of players paper and to bring back to Council as a discussion
document. .
7.
The Group reviewed the original principles agreed by Council, received an analysis of Club
accounts for Clubs at Levels 3, 4 and 5, details of player numbers at Levels 3,4 and 5 that are
currently contracted and written submissions from the NCA to inform their debate and
decisions.
8. The Group also discussed the extent to which the principles and thresholds applied in the
men’s game should be applied to the women’s game. The Group supported the equalitarian
approach for both genders to be treated equally but recognised that the women’s game does
not currently pay players to the extent of the men’s game and hence the issue is not the same
across both genders. The group reminded itself of the mission statement of the project and
agreed that at this present time, the payment of players is not an issue in the women’s game
and hence the payment of players proposals should not be mirrored in the women’s game. The
matter would be kept under review.
9. This paper sets out the Group’s recommendations on the following areas:
a) The financial ranges for payments at certain levels of the game;
b) Content of declaration;
c) Regulatory principles to implement proposals (including reworking
definition of Material Benefit)
d) Loss of entitlements for non-compliance with regulations
KEY IMPLEMENTATION PROPOSALS
A. THE FINANCIAL RANGES FOR PAYMENTS AT CERTAIN LEVELS OF THE
GAME
10. The Group discussed what financial ranges should be applied to the men’s game which would
in effect impose a monetary threshold for gross player payments for certain levels of the game
such that if a club exceeded such threshold, the club will lose its eligibility to certain RFU
funding. Please therefore note that these thresholds are not salary caps which are subject to
sanction if exceeded.
11. When determining the financial thresholds, the Group took into account a number of factors
and evidence including the RFU central registration list of declared contracted players at all
levels of the game and summary information provided by the NCA setting out a breakdown of
payment levels currently being paid by NCA clubs. An analysis of the current, declared
contracted player figures held by the RFU show that 50 clubs at Levels 3 to 5 have no
registered contracted players and hence any non-declared payment to players by clubs would
mean that such clubs are in breach of current regulations.
FINANCIAL THRESHOLDS
12. The financial thresholds proposed by the Group for the men’s game for gross payments to
players (including employment/engagement costs and anything classified as a material
benefit) are as set out below and any club who pays above these thresholds will lose their
entitlement to certain RFU funding:
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Men’s Level 3 - £150 000 plus £25,000 towards the playing element of the cost of
two player coaches
Men’s Level 4 - £100 000 plus £20,000 towards the playing element of the cost of
two player coaches
Men’s Level 5 - £50 000 plus £15,000 towards the playing element of the cost of
two player coaches
Clubs at these levels will be permitted to engage a maximum of two
paid player coaches of which 50% of such player coach costs must be
included in the above threshold up to the player coach maximums set
out above.
In respect of Men’s Level 6 and below:
o Any club, who pays any player any material benefit (whether
contracted or not contracted) in return for playing rugby, will lose
their entitlement to certain RFU funding.
o Clubs at these levels will be permitted to engage one paid player
coach only up to a maximum of £10,000 and no more that 50% of
which shall be in respect of his/her playing duties.
o
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13. By way of illustration only, the above thresholds would allow for the following paid player
budgets in each club:
a) Level 3 - This would allow a club to pay 20 players £150 per match for up to 35
matches per season with an excess of circa £45,000 for employers costs, retainers,
win bonus etc.
b) Level 4 - This would allow a club to pay 20 players £100 per match for up to 35
matches per season with an excess of circa £30,000 for employers costs, retainers,
win bonus etc.
c) Level 5 - This would allow a club to pay 18 players £50 per match for up to 26
matches per season with an excess of circa £26,000 for employers costs, retainers,
win bonus etc.
14. The detail of what constitutes payments to players is set out in more detail at section C below
when we discuss what is classified as a ‘material benefit’.
B. CONTENT OF DECLARATION
15. It is proposed ALL clubs with a men’s team are required by the regulations to complete and
submit a signed declaration each year. The declaration will include the following key areas:
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Name of club and any associated entities.
Level of club
Full amount of ‘Material Benefit’ paid to players and player coaches in the current
season, whether directly or indirectly.
Statement on any players employed in another capacity by the club – e.g. bar staff,
ground staff (to include name, role, average number of hours per week and amount).
Confirmation as to whether the club is paying inside or outside of the thresholds for
the level of the club.
Self-certification that club has complied with its various statutory obligations and
liabilities in relation to PAYE, NI and VAT.
Self-certification that club has complied with its various other legal and immigration
law obligations.
Declaration to be signed by four club officials to include chairman, president,
treasurer and honorary secretary.
Ability for RFU to request such other financial/tax documentation as it so requests
including copy of P35 submission to HMRC.
Guidance notes to accompany declaration, which will include table of thresholds,
definition of material benefit, examples of what constitutes material benefit and
signposting to other supporting materials.
C. REGULATORY PRINCIPLES TO IMPLEMENT PROPOSALS
REWORKING DEFINITION OF MATERIAL BENEFIT)
(INCLUDING
16. The key implementation mechanism for the proposals will be the regulations. Set out below
are the recommendations of how the regulations will need to be amended.
17. Regulations to be amended to include the following principles:
i)
ii)
iii)
iv)
v)
vi)
vii)
Definition of ‘Material Benefit’ to be amended. This is a detailed piece of work which
is set out in more detail at Appendix 1.
All clubs at Level 3 and below playing in the RFU men’s leagues will be required to
submit an annual declaration every year, to include the newly relegated Level 2 club.
Submission of declaration will be mandatory regardless of whether a club is paying
players or player coaches or not.
Submission of completed declaration by a defined date after the end of the season eg
31 May 2019 for a retrospective view of that season. Therefore, the figures for the
2018-19 season will determine if a club qualifies for funding in the subsequent season
and so on.
Submission of declarations should be to a central RFU point, with a copy to the CB.
Submission could be done via GMS by clubs uploading the signed declaration onto
GMS. The IT Department has confirmed that this is possible.
We propose that:
a. The RFU has the power to request that club supply such accounting/financial
information and documents as they so require, including copy of printout of
club’s Government Gateway account showing club’s current liabilities in
relation to PAYE/NI and VAT;
b. The RFU has the power to investigate a club and carry out spot checks upon
reasonable notice (or to instruct a third party to do so on its behalf);
c. The Club must cooperate and comply with all such requests.
viii) We propose that the above general power together with the declaration replaces the
current ongoing obligation for all clubs to provide financial statements every year.
Instead, each CB should decide what financial obligations it wishes to impose on its
local clubs by using the power set out in h).
ix) We propose to include a regulation stating that breach of the regulations, persistent
breaches or providing false or inaccurate information would be dealt with pursuant to
Rule 5.12 and sanction shall be as the panel considers appropriate.
x) Include regulation to make it clear that non-compliance or paying outside the
thresholds will result in the club’s loss of entitlement to RFU funding.
D. PROPOSED LOSS OF ENTITLEMENTS FOR
REGULATIONS
NON-COMPLIANCE WITH
LOSS OF FUNDING ENTITLEMENTS
18. The following summarises the decisions of the Group regarding which RFU entitlement clubs
will be lose should they choose to pay above permitted levels or fail to submit a signed
declaration.
a) Travel funding and Long Distance Allowances.
b) Supplemental Ticket Fund.
c) Rugby Football Foundation (RFF) and (RFU) Interest Free Loans and Grants.
d) Green Deal Interest Free Loans (RFF) up to £20,000.
e) Rugby Football Union Grants :
i.
Consideration will also need to be given to the ability to turn interest free
loans into interest bearing if an award is made and subsequently the club
starts to pay players above the permitted limits. This rate to be set at 2%
above base interest level to ensure that clubs are not in a position to use the
system to gain funding.
ii.
Clauses are to be entered into the terms and conditions for grants to add a
claw back procedure for the grant should the club subsequently start paying
above the permitted levels and or ability to turn this into an interest bearing
loan. However whilst prudent to enter the relevant clause, the decision to
claw back would need to be judged on a case by case basis.
f) Subsidised Match Officials’ costs at Levels 3 and 4.
g) Under the AGP programme:
i.
Clubs will be ineligible for consideration for Rugby Share
ii.
Clubs will be deprioritised for consideration for Rugby Turf subject to AGP
steering group ratification
iii.
Clubs that have already been allocated an AGP through the programme will
be required to pay commercial rates for any hours above the 12 hours
specified in the AGP lease
iv.
Clubs will be required to undertake the management of the facility at their
own cost without subsidy from the RFU
h) Any other RFU cash grants or such other loans/grants as decided by the RFU
(including those associated with sponsor programmes – e.g. NatWest Rugby Force).
i) Constituent Body PFR funding used for individual grants to clubs.
19. The Payment of Players Focus Group agreed that the following would not result in loss of
entitlement to funding for clubs that are paying above the permitted limits provided or fail to
submit a signed declaration:
a) Any associated insurance provision provided by the RFU.
b) International Tickets entitlement.
c) RFU targeted work linked to introducing, developing or growing the game.
APPENDIX 1
REDEFINING MATERIAL BENEFIT DEFINITION
CONTEXT
1.
In the rugby context, ‘payment of players’ means the payment of a ‘Material Benefit’ to any
individual in respect of their participation in the game. “Material Benefit” is defined
generically by World Rugby as ‘money, gifts or any other benefits contracted, promised or
given to a player by any individual, body corporate, partnership (or any other entity or body
whether incorporated or not) at his/her direction in respect of such person’s participation in
the Game’.
2.
The RFU’s definition mirrors the World Rugby definition but goes onto to expand further in
order to give a more specific definition as to what constitutes ‘Material Benefit’.
3.
The RFU regulations currently state that any player that is receiving a Material Benefit
(whether directly or indirectly) for participation in the Game must have a contract in place
which is approved and distributed by the RFU (required by World Rugby Regulation 4). It is
anticipated that this regulation remains and that the wider application is enforced subject to
the receipt of the club’s declaration.
4.
In order to implement the payment of players proposals, the definition of ‘Material Benefit’ is
key to the regulatory framework. For this reason, we need to review and amend the RFU
definition of ‘Material Benefit’ for bring it up to date.
5.
The detail below sets out the thinking behind the redraft of the definition
PAYMENT OF PLAYER/MATERIAL BENEFIT
6.
The payment of players or provision of a Material Benefit (defined in RFU Regulation 7)
includes money, gifts or any other benefits given to a player by any individual, or entity in
respect of such person’s participation in the Game. For example:
 Payment direct or indirectly to the player by the club or associated 3 rd parties for
the purpose of playing (eg Sponsor).
 Provision of cars.
 Provision of accommodation.
 Provision of flights (specifically in the case of overseas players) to or from UK
 Provision of win bonus / preloaded cards.
 Round sum allowances.
 Provision of free food and drinks over and above reasonable level associated with
a match
 Players employed in another capacity by the club or 3rd Party – e.g. bar staff,
ground staff, and junior coach without contract.
7.
For the valuation of non-cash benefits, HMRC guidance will be used and generally the value
of the benefit is worked out on the ‘cash equivalent’ of the benefit - this is usually the cost to
the club less any amount made good by the paid player.
8.
This however does not include reimbursement of employee expenses, incurred wholly,
exclusively and necessarily in the performance of their duties or for reasonable out of pocket
expenses incurred for travel, accommodation, subsistence or other expenses incurred solely
and directly in relation to participation in the Game as an Amateur (for the ‘love of the
game’) see below for more detail.
1.8.1. The following expenses only are proposed to fall outside the definition of Material
Benefit:
(a) the provision of sporting facilities and reasonable provision and maintenance of clubowned sports equipment and training and playing kit;
(b) the provision of suitably qualified coaches and the provision for reimbursement of the
costs of coaching courses (if provided);
(c) the provision of insurance cover and medical treatment (if provided);
(d) the reimbursement of necessary and reasonable out of pocket travel and/or
subsistence expenses incurred by players, match officials, coaches, first aiders and
accompanying individuals travelling to away matches;
(e) the reimbursement of necessary and reasonable travel expenses incurred by players,
match officials, coaches, first aiders and accompanying individuals travelling to home
matches;
(f) reasonable provision of post-match refreshments for players and match officials
(g) The sale or supply of food or drink as a social benefit which arises incidentally from
the sporting purposes of the club
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Note: Clubs that are registered as CASCs or Charities are governed by specific regulations by
HMRC and Charity Commission which need to be considered by clubs In general they include
further restrictions on what clubs can do – although it must be noted that CASC clubs are now
allowed to pay up to £10,000 per year in total to players and remain a CASC.
9.
Students
For clarification purposes, it is worth noting that any provision by an educational institution
to a student of a bursary, scholarship and/or any other education related allowance or benefit
would be caught by the definition of Material Benefit for the purposes of Regulation 7 and
would therefore be counted towards the stipulated thresholds.