The traditional model for retaining a club professional involves paying a basic retainer, giving them a fully expensed shop to supplement their earnings, and allowing them to keep their teaching fees.
This has been a convenient arrangement for club, members and professionals alike, but it raises an interesting point of employment law: is the professional salaried or self-employed?
It is an important question as different tax and NI liabilities apply to each and clubs could be risking penalties if a professional were deemed to be ‘salaried’ when retained as self-employed.
There are some standard tests the court will apply to decide on employment status:-
- What degree of control does the person have over his or her own work?
- Do they have a paid holiday entitlement (this implies they have to be at work for the remainder of the time)?
- How closely are their financial rewards linked to the fortunes of the business?
- Do they employ and pay any staff?
Some clubs have sought to limit the number of competitions their self-employed professionals can be absent from the club to attend. This alone could leave them on shaky ground.
Others, and especially the larger golf chains, have grasped the nettle, moved their professionals to salaried status, restricted their teaching rights and removed their financial interest in the shop.
Will this be the future norm? It is unlikely to prove popular with professionals who compete frequently, but it may be decided by the attitude of the taxman in the months and years to come.
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