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Leicester Sports Partnership Trust - One Year On Tax relief for community amateur sports clubs

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. VAT & Taxation Advice Office. Who are we? Ian Harris: Taxation Officer Part of Leicester City Council’s

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Leicester Sports Partnership Trust - One Year On Tax relief for community amateur sports clubs

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  1. 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

  2. VAT & Taxation Advice Office • Who are we? • Ian Harris: Taxation Officer • Part of Leicester City Council’s Financial Services Division • Where are we? • Room B2.09(B), New Walk Centre • Tel: 0116-252-7470 • Fax: 0116-255-2443 • Mobile/Text: 07980-339581 • E-Mail: ian.harris@leicester.gov.uk

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

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

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

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

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

  8. Main purpose • Main purpose must be: • to provide facilities for eligible sport • to encourage participation in eligible sport

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

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

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

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

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

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

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

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

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

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

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

  20. So over to you….!

  21. 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: 0116-252-7470 Fax: 0116-255-2443 Mobile/Text: 07980-339581 E-Mail: ian.harris@leicester.gov.uk

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