New sports club rules
Posted on 23 Sep 2020
The government has announced it intends to amend the law to make the Community Amateur Sports Clubs (CASC) qualifying conditions clearer for sports clubs in a bid to encourage more clubs to apply and qualify for CASC status, reports Chartered Accountants Northampton Harris & Co.
The CASC scheme provides a number of charity-type tax reliefs to support local sports clubs. In order to access these tax reliefs, clubs must meet certain conditions and register with HMRC.
However, some of the eligibility rules in the legislation are unclear and often cause confusion making it difficult for clubs and HMRC to be certain about whether a club is entitled to relief.
The proposals in the upcoming HMRC consultation will cover a range of issues including:
•The maximum annual fee, to include the costs of participation, which a club can charge and still be considered a CASC. The consultation will seek views on a range of maximum fees up to £1040 (£20 per week). Recognising that some sports have higher costs, CASCs will be able to charge more than the maximum annual fee if they have measures in place to allow people on low and modest incomes to participate fully at a cost of no more than the maximum fee.
•The rules and limits for CASCs on generating income from social and non-sporting activities will be updated to provide clarity. The consultation will explore a number of possible limits. Where clubs generate income over the limits, the consultation will also explore how clubs can separate this activity into a wholly-owned subsidiary company.
•Proposals for more generous rules for travel expenses, and changes to allow clubs to make limited payments to players.
The government will include provisions in the Finance Bill, to be published on 28 March, allowing clearer detailed rules to be set through secondary legislation. HMRC will then publish a consultation document after the Finance Bill is published setting out proposals for these rules.
