In the first instance, we are most reassured by the Department’s continuing efforts to consult with,
and seek the views of those operating at the front-line of sport in Ireland. I shall raise 3 matters in
this email which come from the direct experience of Cricket Ireland:
•
Tax treatment of payments to non-employees of NGBs for services rendered
•
Support to prospective hosts of international sporting events
•
Supporting NGBs to assist Ireland plc in major overseas economic markets
1.
Tax treatment of payments to non-employees of NGBs for services rendered
Revenue permits the repayment of out of pocket expenses tax free. The problem faced by NGB’s is
the payment of fees. Revenue limits for subsistence payments to individuals are €14 for individuals
working between 5 and 10 hours; €33 over 10 hours.
This limit on subsistence payments creates a taxable element to payment made to volunteers,
coaches and match officials. Revenue preference is that these payments are made through the
payroll unless it can be demonstrated that the relationship between both parties meet Revenue’s
guidelines for consultant or self-employed individuals. The difficulty faced by sporting bodies making
these payments through payroll are:
•
NGB’s become de facto employers and face the legal obligations to these individuals under
employment law in areas such as:
•
minimum rate of pay
•
holiday pay entitlements
•
Administration burden
•
Adding and removing a large number of individuals to payroll
•
Collecting employee information
•
Financial burden on NGB’s to increase fees to attract good volunteers
•
Lack of incentive for volunteers who face bureaucratic barriers for committing many hours
to their chosen sport, particularly when it is a very long sport, such as cricket
Individuals must meet Revenue’s guidelines for consultants to be treated as self-employed for tax
purposes. The relationship is not always clear.
The approach previously adopted by most sporting bodies was to put the onus on the individual to
be responsible for their own taxes, or deduct a withholding tax. Revenue are moving away from this
approach and it is the responsibility of the payer to ensure appropriate taxes are deducted, meaning
if there is any doubt then payments should be made through payroll.
It appears that Revenue’s guidelines are geared towards commercial entities and are not practical in
a sporting environment. While the objective of deducting tax at source is understandable for
compliance purposes, the implementation is extremely difficult, is administratively burdensome on
under-resourced organisations, and is disincentivising commitment towards sport. We believe this is
an area which requires review in order to promote and encourage rather than inhibit sporting
activity.
2.
Support to prospective hosts of international sporting events
In advance of hosting the ICC World T20 Qualifier in Ireland in 2015, Cricket Ireland was obliged to
sign a staging agreement with our international federation (ICC). Two major considerations to secure
hosting rights were an indemnity sought by ICC to protect its off-shore commercial revenues (such as
broadcasting and sponsorship) from taxation by the Irish Government by, for example, the creation
of a ‘permanent establishment’ in ROI; and, the provision of a detailed security plan for the event.
We approached the Major Events Unit of Failte Ireland, and Sport Ireland, and neither were able to
provide real insight or support into how we might go about addressing these two important
considerations. In the end, we approached other major sporting bodies which had faced similar
issues, and they were able to assist. Had we not done so, we would have missed out on the hosting
rights, which provided ‘home advantage’ to our team, while the nation would have missed out on
the significant economic and cultural impact of thousands of bed nights and visibility for 8 hours per
day for a whole week seen in Ireland, the UK and 150 broadcast territories throughout the world.
A Unit which is geared to understand the detailed requirements of hosting a major international
sporting event in all of its complexity is essential if Ireland is to punch above its weight in this
competitive environment. One only needs to speak to the likes of the Victoria Major Events Unit in
Australia to see the success a city such as Melbourne enjoys in hosting major sport of global
significance.
3.
Supporting NGBs to assist Ireland plc in major overseas economic markets
In 2010, one year prior to the Cricket World Cup in India, I made significant endeavours with the
Ireland India Business Association to meet with various Government departments and agencies with
the purpose of highlighting the potential to raise Ireland’s profile in one of the major BRIC
economies.
Cricket is, by a long way, one of Ireland’s most visible cultural entity in the Asian sub-continent – noone there has heard of Bono or Brian O’Driscoll but our player Kevin O’Brien is mobbed in public
there – and yet we failed to impress upon any of the agencies we spoke to the potential impact of an
Ireland national team playing in the World’s 3rd largest sporting event against the event host in their
biggest sport. In the end, Ireland famously beat England, and there was not a single trade delegation
there in spite of months of urging. Newly-elected Minister Varadkar did attend one of our matches
during the event and wrote in the Irish Daily Mail that our victory over England raised the profile of
the Irish nation (not just our cricket team) in the world’s largest democracy ‘immeasurably’.
Four years later, and in spite of meeting officials from the DFA, the same happened at the World Cup
in Australia/NZ. Ireland had qualified, pulled off victories against major nations, made headlines all
over the world, and again there was no-one from ‘official Ireland’ to capitalise or sell Ireland PLC on
the back of it. It seemed to speak of a lack of vision leading to missed opportunities for the nation to
capitalise economically and build commercial opportunities in economic markets where cricket has
genuine currency. Putting aside the cricket-specific element of this, once again there is a lack of
ownership over where this might sit – IDA, Tourism Ireland, DFA, Enterprise Ireland?
Forgive the length of this email, but I hope it helps contribute to the much-needed debate about the
power of sport in our society.