Company-Funded Sports & Social Clubs - what is there?

[thepawbroon]

Hello,

I wonder if any of you, especially those working in / running / owning an SME of 100-200 employees, have experience of company-funded sports & social clubs? I'm thinking about an arrangement whereby the company funds a certain amount (say, £100 per month per employee) and a committee of elected or voluntary employees organises extra-curricular events for the benefit of all. The events being wholly- or partially-funded by the company.

If you do have any experiece, I would be pleased to hear about:

- Pros & Cons
- How to ensure most employees felt included
- Pitfalls to avoid
- Tax implications (on company or individual)
- Perm. staff v's contractors

The situation currently is that the company in question is happy to fund things, but it's done ad-hoc, depends on the CEO's or COO's interest at the time and some employees feel excluded.....

many thanks
thepawbroon

Edited by thepawbroon on Monday 1st September 10:51

[Eric Mc]

What do you mean by "company funded"?

Are you suggesting that the sports/social club sets itself up as a limited company OR it operates as a club but has a separate company which provides it with money?

If the latter, where does the separate company get ITS money from?

[foliedouce]

Wow, that's a very generous budget.

We don't have a social club as such but we do a significant amount of incentives / events for our staff, from boozy nights to treasure hunts to sending our top sales guys away on a holiday.

The first thing to say is that if the company is paying the £100 per month then they will also need to pay tax on this as if they are paying cash to the staff (or the staff will need to put it on their p11d which makes the benefit less of a benefit)

Depending on how much your teams earn, this could almost double the cost to the business (or half the amount being put in if you keep the budget the same)

In terms of making it inclusive, why don't you do a survey monkey to see what people want to do? We do things on a monthly, quarterly and yearly basis. You can't please all the people, all the time and sometimes we push the limit of what people would be comfortable with. For example we have done a freefall parachute jump and aerobatic flying. Most of the team would never sign up to do this on their own, so it was a great experience that has caused lasting memories and an emotional attachment to the business.

Not sure what we spent on staff last year but I just signed off the PSA (tax on these benefits) and it was £160k for just over 100 perm staff. Made me wince, but it is worth it for the buy in you get and it makes it a great place to work.

[thepawbroon]

Eric Mc said:

What do you mean by "company funded"?

Are you suggesting that the sports/social club sets itself up as a limited company OR it operates as a club but has a separate company which provides it with money?

If the latter, where does the separate company get ITS money from?

Thanks for the resposne,

No, not really, nothing as formal.

At the moment things like strips for the 5-a-side football side, some costs for a group cycle weekend etc. are paid directly by the company from the general office overhead budget, on a case-by-case basis. I was just thinking about the S&S having a more planned-out budget and a better way of engaging all employees. I don't envisage a "Club" as per the Company's House definition. More like a budget allocation.

I suppose I was looking for more advice around the social & political pitfalls, as well as any possible tax implications. The budget wouldn't be big enough to warrant a subsidiary or stand alone company.

cheers,

[thepawbroon]

That's brilliant feedback thanks!

foliedouce said:

Wow, that's a very generous budget.

Yes! It's just a random figure at the moment.

foliedouce said:

We don't have a social club as such but we do a significant amount of incentives / events for our staff, from boozy nights to treasure hunts to sending our top sales guys away on a holiday.

Are these generally fully-paid-for by the company or do you ask for some contribution from the individual? I've found that just asking for £5 or £10 is enough to make sure everyone that signs up, actually turns up.

foliedouce said:

The first thing to say is that if the company is paying the £100 per month then they will also need to pay tax on this as if they are paying cash to the staff (or the staff will need to put it on their p11d which makes the benefit less of a benefit)

Depending on how much your teams earn, this could almost double the cost to the business (or half the amount being put in if you keep the budget the same)

Yes I suspected this, not much we can do about that is there? I should investigate tax treatment of the massive company Christmas parties.....

foliedouce said:

In terms of making it inclusive, why don't you do a survey monkey to see what people want to do? We do things on a monthly, quarterly and yearly basis. You can't please all the people, all the time and sometimes we push the limit of what people would be comfortable with. For example we have done a freefall parachute jump and aerobatic flying. Most of the team would never sign up to do this on their own, so it was a great experience that has caused lasting memories and an emotional attachment to the business.

Yes that's the kind of idea, your events sound good!

foliedouce said:

Not sure what we spent on staff last year but I just signed off the PSA (tax on these benefits) and it was £160k for just over 100 perm staff. Made me wince, but it is worth it for the buy in you get and it makes it a great place to work.

I think you've got my way of thinking, it's not something you can place for firm monetary value on, but building the loyalty and team ethos is the aim.

Thanks again.

[Eric Mc]

I see what you are geting at - I think.

You already have a trading limited company (of which yuou are a director?) and you want to use the company to pay for recreational facuilities for your staff?

Is that correct?

If that IS correct, then you need to be aware of the taxable Benefit in Kind implications for providing such facilities.

Here is what HMRC says -

Facilities open to all employees, but not to the general public


Definitions or restrictions -

You provide sporting or recreational facilities (or vouchers that are exchangeable for their use) that meet all of the following conditions:

the facilities are available for use by all of your employees
the facilities aren't available to the general public
the facilities are used mainly by employees or former employees or members of employees' families and households (the facilities don’t have to be used mainly by your employees - this condition also covers use of the facilities by employees of other employers if you've grouped together with them to provide the facilities)

none of the exceptions outlined below applies

What to report, what to pay

You have:
no reporting requirements
no tax or NICs to pay

Exceptions
The tax and NICs exemption doesn't apply if you provide any of the following:

facilities based at premises used wholly or mainly as a private dwelling
holiday or other overnight accommodation (including any associated sporting facilities)
use of a mechanically propelled vehicle (including road vehicles, boats and aircraft)
For the tax and NICs rules that apply in these cases see the section 'Other sporting facilities'

[sumo69]

£160k PSA payment!!! You are a very generous employer.

David

[foliedouce]

sumo69 said:

£160k PSA payment!!! You are a very generous employer.

David

Thanks, it's a cliché, but work hard, play hard is part of our culture. I had a team working until 3am 4 nights last week to get a client deliverable over the line - that stuff has to be recognised with more than just bonus.

thepawbroon said:

Are these generally fully-paid-for by the company or do you ask for some contribution from the individual? I've found that just asking for £5 or £10 is enough to make sure everyone that signs up, actually turns up.

Generally fully funded, if there is booze involved we will usually do a free bar until x o'clock then self funded. We try to make it inclusive / fun so rarely have an issue with attendance. Having a good co-ordinator is key here to educating people what the company is investing into them hence it's courtesy to turn up. They always have fun when they do Make sure you get someone to put their arm around the newbies, as they can sometimes feel intimidated when they don't know many people and hence will find an excuse not to turn up.

thepawbroon said:

Yes I suspected this, not much we can do about that is there? I should investigate tax treatment of the massive company Christmas parties....

HMRC allow £150 per year for Xmas / staff fun before they start taxing you, so I suspect that's where that money is coming from. Doesn't even touch the sides on a good meal / piss up.

Good luck with the initiative - at least you are doing something which is more than most companies. You can get some really good ideas from the Best Companies to work for league table in the Sunday Times.

[thepawbroon]

Thanks foliedouce,

sounds like culturally our companies are similar, would you be able to share what type of products/services you provide and which sector?

We are engineering consultancy for oil & gas, we face lots of competition to win work and attract good people. Off to read the Sunday Times Best Companies league now.

cheers,

[foliedouce]

thepawbroon said:

Thanks foliedouce,

sounds like culturally our companies are similar, would you be able to share what type of products/services you provide and which sector?

We are engineering consultancy for oil & gas, we face lots of competition to win work and attract good people. Off to read the Sunday Times Best Companies league now.

cheers,

We offer Project & Change Management Consulting across Oil & Gas, Retail Banking and the NHS

Agree, finding (and retaining) good staff at realistic salaries is always a struggle!