A Question of (Loughborough Finance for) Sport
Our experience tells us there is often extreme uncertainty for those newly in receipt of income from their sport, from compliance requirements (do you need to do a tax return) through to longer term planning (how do I setup a pension).
Below are some questions regularly asked during initial discussions, mainly around compliance. Following that are other advisory based questions that often come up as part of the initial discovery call or first few months working with our clients.
This frequently asked questions post is focussed on sports professionals. For sports businesses please see our outline services & contact us for a free, no obligation, initial discussion.
Compliance & setup
- Do I need to complete a tax return?
- It depends on your status & level of income, but this is usually something we can advise on an initial call. Although early on you might conclude from HMRC guidance that you still count as carrying out a ‘hobby’, it might be advantageous to ‘turn professional’ sooner rather than later.
- Do I need an accountant?
- You can complete your own tax return, but an accountant will often add value through their knowledge of what is & isn’t taxable, deductible expenses & ensuring accuracy of your returns.
- I already have an agent, why do I need an accountant as well?
- Agent’s roles vary, but they are generally focussed on generating income & opportunities as well as ensuring receipt of the income earned. We look to work closely with agents as part of our client’s support team to provide relevant advice at any point in time.
- Why should I choose LFS over ABC Accountants?
- Our services are client focussed, developed over several years by our own elite athlete. Through working with some of the most respected athletes & mentors within sport we have been able to tailor these services to the overall needs of sports professionals throughout their career. This, combined with our extensive technical expertise in this specialist sector, ensures our clients have a clear understanding of their financial & tax affairs from specialist sports accountants.
- Should I setup a limited company, & if so what does that involve?
- A company structure isn’t right for everyone, & might actually result in you losing some tax advantages like utilising early year losses & claiming certain expenses.
- Are your fees fixed?
- All our fees are fixed in advance. We work on an annual basis but invoice monthly with no fixed term contract – see our Service Plans for details. You will never receive an invoice that hasn’t been agreed in advance.
- Do I need to be Leicestershire based to work with you?
- Certainly not! Loughborough is world renowned for high performance sport & we’re very proud our main office is here, but we recognise that even our Loughborough based clients are very much operating worldwide. Our technology, communication channels & Service Plans have been developed to ensure we can provide the same quality of service to clients wherever they are in the world.
- What is the ‘fee protection insurance’ referred to in your Service Plans?
- We offer this as standard to all clients & this covers our time costs in the case of any enquiry from HMRC. Whilst the chance of an enquiry is relatively low this gives peace of mind to our clients that we will deal with any enquiry without them incurring additional fees.
Advisory & planning
- Lots of websites refer to tax refunds – is this something I’m eligible for?
- Possibly! Our initial discovery call will identify if there is a potential claim for earlier years, but our focus is on working closely with clients from an early stage to ensure the correct tax position each year without the need for retrospective claims.
- A lot of my income is from competitions &/or winnings overseas – do I need to pay tax on that in the UK?
- Usually as a UK resident you will be taxable in the UK. A lot of income will have tax deducted at source in the country where you were paid from (where you competed). Through double taxation treaties this can often be offset against your UK tax liabilities. We work with clients & their agents to obtain all relevant details to maximise any such claims.
- My agent has suggested registering for VAT, but several peers have cautioned against this – can you advise on the pros & cons?
- That’s a separate blog in itself, but we certainly wouldn’t recommend rushing into registering for VAT before a detailed discussion with an accountant.
- Do you provide payroll services?
- Annual payroll for up to two employees is included as standard within our Silver & Gold Service Plans.
- I want to get on the property ladder & stop paying dead money on rent – can you help with that?
- Probably our most often asked question during a discovery meeting! We discuss our client’s goals both in terms of their sports career & personal finances to establish an overall financial strategy. Knowing when any purchase/move is planned is generally one of the biggest financial commitments & this is therefore key for us to help ensure income over several years stacks up for those requirements.
- I’ve been recommended to start a pension; is this a service you provide?
- We work closely with several specialist wealth advisors that provide a variety of pension options. We can advise on how to fund a pension & will meet jointly with the pension advisors to set out a suitable investment strategy.
Our Athlete Service Plan has been designed for those on the Olympic & Paralympic World Class Programme, but can be tailored to meet the needs of other sports. Please download your copy to see what services are included.
If you still have questions, want to know more details, or just want to have a conversation about your sport then please contact us for a free, no obligation, initial discussion.