I represent a sports club and we are looking to engage the services of a self-employed coach. What do we need to do to satisfy the taxman that the coach is self-employed?
You will need to satisfy yourself that the intended working relationship will meet the HMRC guidelines for self-employment. These fall into three main areas – substitution, control of the work and financial risk – with substitution being the most important factor. Failure to meet the guidelines would mean the club would risk the coach being deemed to be an employee of the club and the taxman would then potentially demand back tax, interest and penalties from the club. Failure to meet the guidelines could also have serious VAT implications and the club would also run the risk that the coach could then take the club to a tribunal for lost employment rights. It is a common misconception that a club can wash its hands of any responsibility by getting the coach to sign a disclaimer that it is the coach’s responsibility that he/she is truly self-employed – the taxman would only see this contract term as an indicator of the intention of the club/coach to work in a self-employment relationship
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