What are Community Amateur Sports Clubs?
Local amateur sports clubs can register with HMRC which then allows then to benefit from various tax reliefs and benefits. The scheme is open to qualifying clubs within the UK. This allows similar reliefs available to charities however once you have been given CASC status you cannot apply to be a charity. In order to qualify you must already be satisfying the required conditions, it is not enough to say you will satisfy them once you have the status.
Conditions of the scheme:
- be open to the whole community, including having fees that are not a significant obstacle to membership
- be organised on an amateur basis, i.e. a not for profit basis where any profits are re-invested into the club, also any payments to players must not exceed £10,000
- have as its main objective the provision of facilities for, and the promotion of participation in, one or more eligible sports
- not exceed £100,000 of income from non-member trading and property income
- must have fit and proper persons managing the club
- must have 50% participating members who actually participate in the sport
All conditions must be met to qualify, and must already be meeting them prior to registering.
It is vital that the club maintains the records sufficient to prove that the club is meeting these conditions, such as records on who are participating members and who isn’t. You also need to ensure you have the records to show what percentage of the income is derived from members and non-members.
Tax reliefs and benefits available:
- Exemption from corporation tax on
-  income from non-members if its less than £50,000 a year
- property income if its less than £30,000 a year
- interest received
- chargeable gains
The income and gains must be used for the purposes of the club, to promote and facilitate participation in sports, otherwise the income may be taxed.
- Gift Aid can be claimed on qualifying donations
- Mandatory 80% charitable rates relief on business rates
If you are at risk of exceeding the income limits you may want to consider setting up a trading subsidiary. We can advice and assist with this if this is an option to the clubs. Otherwise you need to take steps to reduce the income form non-members or HMRC will require you to deregister as a CASC, where you will lose the tax reliefs and benefits.
Deregistration implications:
If you are no longer meeting all the conditions and therefore no longer eligible for CASC status you must inform HMRC of this with the date the club ceased to be eligible for the scheme.
If you deregister they there may be a charge to corporation tax on the club’s property as under the CASC scheme you are deemed to have disposed of the property and required it at market value on the date of deregistration.
It is therefore important to ensure before you register for CASC status that this is right for your club.
If you would like any further advice on this or any other matters regarding your not for profit organisations then please contact Sophie Graham.
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