The Rugby Paper (8th Septmber) has predicted that Premiership Rugby will brush their nine-month salary cap investigation under the carpet this week and refuse to take any action against Bath and Saracens, who have been alleged to have broken the regulations.

Both clubs have been under investigation since last December for allegedly breaching the cap, which has been raised to £5.5m for the forthcoming season.

A report into the investigation was due to be presented to clubs last season. However, it was then postponed until June and then pushed back even further. It will finally get discussed when Premier Rugby stakeholders get together for their annual pre-season meeting this week, the publication reported.

For action to be taken against both clubs it would need a 100 per cent agreement from the stakeholders. That reportedly won’t happen, however, with a well-placed source revealing to The Rugby Paper some of the deals that have been going on behind the scenes to gain support.

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The RFU have recently circulated an email flyer entitled “All Bets Are Off” re-iterating their position on gambling and corruption as it relates to agents, players and coaches.

Their tough stance on betting within the professional game – especially betting on rugby, playing to a pre-ordained outcome and/or passing on inside information – has been reinforced recently by the case of Phil Blake, a coach at Leicester Tigers.

Here are the details according to Sky Sports News at the time (25th June 2015): The defence coach Phil Blake has been handed a six-month ban by a Rugby Football Union disciplinary panel, having been found guilty of two breaches of RFU Regulation 17 (Anti-Corruption and Betting).

The 51-year-old Australian was charged with betting on two matches, Leicester’s Champions Cup game against Toulon in December and the Premiership meeting with Newcastle in March.

The ban began on 24 May and will run until 24 November, and Blake was also fined £669 (the profit made on the bets placed).

Blake, who placed the bets on touch-screen self-service machines at Leicester’s Grosvenor Casino, told the disciplinary panel: “Having my whole career on the line for a minimum gain is something I will regret for the rest of my life.”

When initially informed of the RFU investigation, Blake had explained by letter: “I had no knowledge of the specific regulations relating to gambling under the jurisdiction of the RFU.

“I am, of course, aware that it is not appropriate, in most jurisdictions, to gamble against one’s own team, but I was not aware of the exact regulations that pertain in the UK.

“I saw some very favourable odds on Tigers to beat Newcastle and thought that there would be little harm arising from my betting on Tigers to win, as, obviously, it is my professional duty to try and do everything possible to ensure that Tigers did, in fact, win.

“I put the bet on against Toulon in very similar circumstances.

“No one could be more sorry than myself that this incident has taken place.”

RFU disciplinary panel chairman Christopher Quinlan said: “This is the first such case that we know of in rugby union and is certainly the first brought under the relatively new Regulation 17, so this is new ground.

“In arriving at the appropriate sanction, we have been careful to remind ourselves that we must not make an example of Phil Blake.

“We have imposed a sanction which we consider fair and proportionate to what he did, while having due regard to the proper consideration of deterrence.

“We have sought to strike a proper balance between the competing factors and arrive at a sanction we consider to be just.

“We must have regard to the wider interests of the game. It is important that those involved in the game and the wider public understand that any breach of the anti-corruption and betting regulations will and must be treated seriously.”

Blake had an appeal against the length of the ban dismissed and was ordered to pay costs in the sum of £500.

Antony Davies, who chaired the RFU Appeal Panel, said: “We find that the RFU Disciplinary Panel correctly applied its findings of fact arising from the evidence to the sanctioning process set out in the Regulations.

“We cannot find any fault with the Panel’s sanctioning process.  The offending clearly merited an immediate period of suspension.

“Six months was, in our view, well within a reasonable range and was not so excessive as to be unreasonable.”

Born in London, Blake joined Leicester in June 2014 on a one-year deal, which was not extended at the end of the campaign.

In the light of the former Manly coach’s ban, the club released a statement which read: “We acknowledge the decision of the disciplinary hearing in relation to the conduct of Phil Blake and the panel’s views on betting within professional sport.

“The club also fully endorses the governing body’s regard for the wider interests of the game in respect of any breaches of the anti-corruption and betting regulations.

“Phil Blake was under contract for the 2014/15 season and is no longer employed by Leicester Tigers.

“The club would, however, like to place on record, as it did during his time at Leicester, that he was a popular and valued member of the coaching team, and we hope he is fully able to return to the game in a suitable capacity at the end of the period laid down by the disciplinary hearing.”

See also:

Link to full version of Reg 17 Anti-Corruption and Betting on RFU website

Link to a legal analysis of the case on Liam Smith blog

An appraisal of the new situation by Anil Matharu and Sam Purkiss of Harbottle & Lewis

Player representatives, clubs and sports governing bodies have until 2 September 2015 to consult with HMRC to ensure that new plans to tax players on their income from testimonial matches and associated benefit events are fair and proportionate.
Where previously players would normally only pay income tax on testimonial monies received from their employer clubs, going forward all testimonials – including those run by independent testimonial committees on a player’s behalf – will give rise to an income tax liability. The proposed changes will affect anyone who is awarded a testimonial match or benefit event from 6 April 2016 onwards.
Current position
At the moment there is no specific UK income tax legislation that covers sports testimonials. HMRC guidance has long advised that any testimonial which is organised outside of the terms of a player’s employment contract and which is not part of a club custom will not create an income tax liability for the player.
However, where a player has a contractual right to a testimonial match or benefit event, or where the employer habitually grants a testimonial after a set period of service, the proceeds will be subject to income tax and National Insurance contributions because they are considered to be earnings from employment.
Proposed changes
HMRC now considers that its guidance regarding independently organised testimonials is not aligned with income tax principles, and that the increased commercialisation of testimonials for high-earning professional sportspersons is at odds with one of the original reasons for enabling such testimonials to be exempt from income tax: namely, to benefit the poor, amateur era sportsperson and as a way for supporters to demonstrate their gratitude to a loyal and long-serving player.
In October 2014, HMRC expressed its view that there has been “widespread misunderstanding” of their guidance. It argued that proceeds from testimonials, whether organised independently or by a player’s employer, are primarily derived from that player’s employment and that the sums received should normally be taxable and liable to Class 1 NICs as earnings, in line with the treatment applying to voluntary payments made by the public, such as tips given to waiters, hairdressers and taxi drivers, which is technically taxable income.
Consultation
HMRC is now seeking views from relevant stakeholders such as player representatives, clubs and governing bodies, regarding its proposals to legislate the tax treatment of such income. The consultation invites stakeholders to respond to nine questions regarding issues such as:
• Whether the government should introduce an exempt amount of testimonial earnings which are not subject to income tax or NICs
• Whether any exemption should apply for life or only for each sequence of sporting testimonials
• Whether any exemption should be capped
• Whether independent testimonial committees should be treated as the legal employer for the purposes of the testimonials to enable to them to offset their corporate tax liabilities.
Testimonial committees
Typically, testimonials and benefit events are organised by independent testimonial committees rather than the employer club itself. Such committees are set up as unincorporated associations and are accountable for corporation tax on the majority of the income derived, such as gate receipts (even where these and other income streams are described as a “suggested donation”). The net proceeds are then paid to the player.
Under the new proposals, testimonial committees will continue to be liable for corporation tax. There is therefore a risk of double taxation on the proceeds: Corporation tax to be paid by the committee and then income tax to be paid by the player. Mindful of this, HMRC has suggested that testimonial committees could be deemed to be the player’s employer for the purpose of calculating corporation tax on testimonial earnings, thereby allowing them to deduct “employment” related costs, such as the player’s fee, from the income.
Charitable giving
In recent years several high-profile footballers have donated most or all of their testimonial earnings to charity. HMRC has emphasised that the current tax relief applying to such arrangements will not be affected.
Our analysis
While the underlying legal basis for changing the guidance may be well founded, some of the rationale given by HMRC for the proposed change appears contrived. The suggestion that there has been a “widespread misunderstanding” of the guidance regarding the taxation of independently organised testimonials could be seen as acknowledgement that the guidance itself was ambiguous and always open to creative interpretation. Similarly, the argument that players agreeing under their employment contracts to “abide by the rules of the employer” in general terms, represents a further link to employment-related remuneration (where the rules make provision for sports testimonials) is a tenuous one.
Responses to the initial call for evidence from HMRC in October 2014 predominately came from professional tax advisers, with very few sports organisations responding. Now is the time for those with a vested interest in the welfare of sportspersons and particularly those who rely heavily on the proceeds derived from a testimonial match or benefit year, to make themselves heard.
Responding to the consultation
The HMRC consultation closes on 2 September 2015. If you would like further information regarding the consultation or any issues relating to the administration of sports testimonial and benefit events, please contact Anil Matharu (anil.matharu@harbottle.com) or Sam Purkiss (sam.purkiss@harbottle.com)

English clubs and agents have been warned by the ARB that they can expect to be fined £1,000 if agent declaration forms are not signed and submitted by the end of July 2015.

The Agents Review Board (consisting of representatives from RFU, Premiership, Championship, PRA and ARA) agreed that from 1st August 2014 all agent declaration forms linked to player contracts should be signed by all parties i.e. agent, player and club. The initiative was introduced to make dealings more transparent.

Not all Championship and Premiership clubs have been complying with this directive. A deadline of the 1st August 2015 has been set to ensure all forms due from the 1st August 2014 (that’s all new contracts for last season) are completed and submitted. Failure to do so will result in the standard sanction on failure being applied. This covered in Reg 8.4.4. can be expressed as a fine of up to £1K.

Depending on the circumstances, all, some or one of the three parties can be held responsible for non-compliance.