APPENDIX 5 – POTENTIAL COST OF A PAYE SETTLEMENT – AN ILLUSTRATION
Assume:
20 players
1 manager
1 coach/physio
25 matches per season
All 22 individuals are paid on average £150 per week with an additional £10 for expense
payments which are not supported by receipts
3 ‘voluntary’ staff treated as casuals paid £20 per day for each match
Potential liability 2012/13 tax year
Annual payments
22 x (£150 + £10) x 25 weeks
3 x £20 x 25 weeks
Income tax at, say 20%
£88,000
£ 1,500
£89,500
£17,900
National Insurance Contributions*
Annual payments - employers
22 x (£150 + £10 – £144) x 25 weeks £8,800
Employees (£14 x 22 x 25) at 12%
£7,700 x 12%
Employers at, say 13.8%
£8,800 x 13.8%
Total Annual Cost
£
924
1,214
£20,038
If PAYE has not been deducted and should have been for , say, the last 4 years the assessment
could be extrapolated across the whole period, and may reach £80,152 on top of which
penalties and interest would be payable. This settlement only relates to the staff mentioned
above, and could be even higher than this if PAYE and NIC has not been applied to payments
to other employed individuals.
*National Insurance Contributions (NIC) for employers are calculated on payments made in
excess of £144 per week. Therefore, for payments to an individual who earns £150 per week
plus £10 expenses, the difference between £160 minus £144 is liable to NIC. For employees the
limit is £146. Match day staff are not liable to NIC as they earn less than the £146/£144 weekly
thresholds.