Leicester Sports Partnership Trust - One Year On Tax relief for community amateur sports clubs Ian M Harris, BA(Hons), FIIT, MAAT Leicester City Council VAT & Taxation Advice Office

n Who are we? –Ian Harris: Taxation Officer –Part of Leicester City Council’s Financial Services Division n Where are we? –Room B2.09(B), New Walk Centre –Tel: –Fax: –Mobile/Text: –

CASCs and tax: what we’ll cover n What kind of club can register as a CASC n Tax relief for registered CASCs n Relief for donors n Non-Domestic Rates relief for CASCs n VAT and sports clubs

Unincorporated organisations and Corporation Tax n Companies are liable to Corporation Tax n Clubs are regarded as companies n But CASCs are exempt from CT on: trading income less than £10k pa trading income less than £10k pa income from property less than £20k income from property less than £20k interest interest capital gains capital gains n Providing used for ‘qualifying purposes’

What kind of club qualifies as a CASC n Must be: formally constituted with written constitution formally constituted with written constitution open to whole community without discrimination open to whole community without discrimination organised on an amateur basis organised on an amateur basis have main purpose to provide facilities for and promote participation in ‘eligible sports(s)’ have main purpose to provide facilities for and promote participation in ‘eligible sports(s)’ provide such facilities in defined ‘eligible area’ provide such facilities in defined ‘eligible area’ managed by ‘fit and proper persons’ managed by ‘fit and proper persons’

Open to the whole community n Membership open to all without discrimination n Use of facilities available to all members without discrimination n Fees set at level that does not present obstacle to membership or use of facilities

Organised on an amateur basis n Non-profit making n Provides members (and guests) with ordinary benefits of local amateur sports club n On dissolution net assets applied for approved sporting or charitable purposes

Main purpose n Main purpose must be: to provide facilities for eligible sport to provide facilities for eligible sport to encourage participation in eligible sport to encourage participation in eligible sport

Provision of facilities n Could be facilities owned by club n Could be facilities hired by club, eg from local authority n Could just be organisational infrastructure

Encourage participation n Not enough to just provide facilities n Must encourage participation among all members n If high proportion of social members cannot be CASC n Beware ‘social clubs’ n Beware multi-sports clubs

The location condition n Must be in UK or elsewhere in EU or EEA or in ‘relevant territory’ (EU law requirement!) (EU law requirement!) n Must provide facilities in defined location village, town, neighbourhood, area village, town, neighbourhood, area

The management condition n Must be managed by fit and proper persons n ‘Authorised official’ chair, secretary, treasurer chair, secretary, treasurer n ‘Responsible persons’ other committee members involved in club’s management other committee members involved in club’s management n CASC must be satisfied that fit and proper persons n Ask to read and endorse HMRC guidance

Tax reliefs for CASCs n No Corporation Tax on: profits from trading providing turnover less than £30k pa profits from trading providing turnover less than £30k pa income from property, eg lettings, providing less than £20k pa income from property, eg lettings, providing less than £20k pa interest interest capital gains capital gains n Providing income/gains used for ‘qualifying purposes’

Income from members n Income from members not trading income so outside scope of Corporation Tax n Membership fees including joining fees including joining fees n Sales to members equipment and clothing equipment and clothing refreshments (including bar sales) refreshments (including bar sales)

Relief for donors: GiftAid n CASCs eligible to GiftAid on donations received just like charities n Businesses not eligible to GiftAid but can treat donations to CASCs as tax- deductible n Gifts of assets to CASCs exempt from CGT n Bequests to CASCs exempt from IHT

GiftAid n CASC reclaims equivalent of basic-rate Income Tax suffered by donor on earnings used to fund donation n Amounts to 25p in the Pound n Higher-rate and additional-rate taxpayers can reclaim more themselves n Difference between higher/additional- rate and basic-rate

Non-Domestic Rates Relief n CASCs eligible to mandatory 80% Rates Relief on premises occupied for purposes of club n CASCs only pay 20% of normal Non-Domestic Rates

VAT and sports clubs n No special rules for CASCs n ‘Normal’ VAT rules apply to sports clubs n VAT-registration threshold £77k pa n Can only reclaim VAT incurred if VAT-registered and in connection with VATable supplies made

VAT and sports clubs n Supply of sports facilities by NPDO exempt from VAT n Entry fees to sports competition run by NPDO exempt from VAT n Fundraising events run by NPDO exempt from VAT fete, bazaar, concert, ball, dinner fete, bazaar, concert, ball, dinner fundraising auction fundraising auction

So over to you….!

Ian M Harris, BA(Hons), FIIT, MAAT VAT & Taxation Advice Office Financial Services Division Leicester City Council Room B2.09(B) New Walk Centre Tel: Fax: Mobile/Text: