OcTaxLaw.com

Sporting Intelligence reports this morning that:

Leading football clubs are being heavily targeted by HMRC over perks afforded to players and WAGs partially because the taxman has already received information and tip-offs relating to major financial discrepancies at at least one top Premier League club,Sportingintelligencecan reveal.

The finance directors at all Premier League were recently sent a questionnaire containing 181 questions looking closely into the financial affairs of the clubs and players, specifically the issue of perks, as HMRC looks to crack down on blatant abuses of the system.

And as they also note:

The sheer scale of the questionnaire has surprised even tax experts.

Sportingintelligencecan exclusively reveal the questions from the questionnaire, including:

• 4.14 Are any payments made into trusts or sub-trusts, whether in the UK or abroad, for which employees or family members are, or are potentially, the beneficiaries?
• 1.2 Are any expenses paid, or benefits provided, to players or other employees spouses, partners or other family members, whether in the UK or abroad?
• 11.6 Has the club paid any expenses relating to an employees private holiday costs? If so please provide details.
• 11.7 Are there any circumstances where the cost of spouse travel will be paid for by the Company? If so please provide details.
• 22.1 Are complimentary tickets, use of a box, etc. provided for employees? If so please provide full details.

Sportingintelligencealso understands the tax affairs of foreign players will come under greater scrutiny. In some cases players have been found not to have paid National Insurance contributions (NIC).Other questions asked:

• 5.3 How does the club treat payments to foreign players for payroll purposes?
• 4.2 What controls are in place to ensure that any amounts which are paid out are treated correctly for tax and NI purposes?

Quite right too.

Rumour has it there’s not just smoke in this case, but a fire too. And tackling such issues in such a high profile way is wholly appropriate.

And there’s muchmorein thearticlethan the bits I’ve noted.

The Arkansas lottery has been in business only eight months and already lottery officials are looking for new ways to entice consumers to buy more tickets.  They want to sell tickets in vending machines, claiming that the machines are necessary for the future of the lottery and for the college scholarships the lottery helps fund, as if state-run lotteries were the only possible way to help students afford college.

From Bloomberg Businessweek:

[Arkansas Lottery] Director Ernie Passailaigue said businesses are seeking ways to cut labor costs, and automating the lottery is an important way to boost sales and help vendors save money. …

Passailaigue said the lottery can increase sales each year by 2.5 percent to 5 percent, but that’ll require the vending machines.

“You’re not going to have a lottery in five to seven years” without the machines, he said.

Arkansas Family Council spokesman Jerry Cox, a lottery opponent, said he was puzzled by Passailaigue’s claim about the machines’ importance.

“He’s exaggerating,” Cox said after the meeting. “He (Passailaigue) has already said the lottery is exceeding expectations. And he turns around and says we’re going out of business if we don’t have lottery-vending machines.”

Cox has asked the legislature’s Lottery Oversight Committee to study the machines’ effect on underage and compulsive gambling. Legislators could vote to ban the machines in the session that begins in January.

Passailaigue said at the meeting that more than 30 states use the machines and critics of the automated sales are operating with “erroneous information.”

Vending machines are simply another way to sell tickets and don’t pose any new lottery-related tax policy problems; the basic issues are the same whether the tickets come from a human or a machine: lotteries are a regressive, complex, hidden form of taxation that policymakers turn to when they want to raise revenue without taking the blame for raising taxes.

However, even though the basic tax policy problems are the same, there’s something about selling lottery tickets in a vending machine that highlights the absurdity of government-run lotteries. Vending machines are a convenient way to sell many products, and there’s no reason they can’t be used to sell recreational items like lottery tickets. But there’s also no reason for lottery tickets to be sold by the state rather than simply taxed by the state (sales and/or excise taxes). When the state sells the tickets and takes a huge cut, policymakers have a vested interest in their constituents gambling heavily, or at least heavily enough to fund certain programs.  Imagine the public outcry if a state granted itself a monopoly on cigarette sales, started advertising smoking with catchy jingles, and put cigarettes in vending machines to encourage people to smoke more.

There are three questions that policymakers and lottery officials in Arkansas (and other states) might want to ask before installing these machines:

1) Many states turn to government-run gambling during recessions, but is more money spent on gambling necessarily a good thing? Isn’t there a point where lawmakers should step back and ask, Are people really better off spending more on lotteries when times are tough—or even when the economy is in good shape?  How about letting people decide for themselves what to spend money on, without encouragement—or discouragement—from the state?

2) If vending machines are truly necessary to keep lotteries going, what is the next change that will be necessary in a year or two? Other states have been adding one “improvement” after another to their lotteries to keep customers coming back, and at some point you have to ask, Where does it end?  

3) And finally, are there really any goods that should be sold by a state government in a vending a machine? 

More on Arkansas and state-run lotteries.