Leicester Sports Partnership Trust - One Year OnLeicester Sports Partnership Trust - One Year On

Tax relief for community Tax relief for community amateur sports clubsamateur sports clubsIan M Harris, BA(Hons), FIIT, MAATIan M Harris, BA(Hons), FIIT, MAATLeicester City CouncilLeicester City CouncilVAT & Taxation Advice OfficeVAT & Taxation Advice Office

VAT & Taxation Advice OfficeVAT & Taxation Advice Office

Who are we?Who are we?– Ian Harris: Taxation OfficerIan Harris: Taxation Officer– Part of Leicester City Council’s Part of Leicester City Council’s Financial Services DivisionFinancial Services Division

Where are we?Where are we?– Room B2.09(B), New Walk CentreRoom B2.09(B), New Walk Centre– Tel: 0116-252-7470Tel: 0116-252-7470– Fax: 0116-255-2443Fax: 0116-255-2443– Mobile/Text: 07980-339581Mobile/Text: 07980-339581– E-Mail: ian.harris@leicester.gov.ukE-Mail: ian.harris@leicester.gov.uk

CASCs and tax: what we’ll coverCASCs and tax: what we’ll cover

What kind of club can register as a What kind of club can register as a CASCCASC

Tax relief for registered CASCsTax relief for registered CASCs Relief for donorsRelief for donors Non-Domestic Rates relief for CASCsNon-Domestic Rates relief for CASCs VAT and sports clubsVAT and sports clubs

Unincorporated organisations Unincorporated organisations and Corporation Taxand Corporation Tax

Companies are liable to Corporation TaxCompanies are liable to Corporation Tax Clubs are regarded as companiesClubs are regarded as companies But CASCs are exempt from CT on:But CASCs are exempt from CT on:• trading income less than £10k patrading income less than £10k pa• income from property less than £20kincome from property less than £20k• interestinterest• capital gainscapital gains Providing used for ‘qualifying purposes’Providing used for ‘qualifying purposes’

What kind of club qualifies as a CASCWhat kind of club qualifies as a CASC

Must be:Must be:• formally constituted with written constitutionformally constituted with written constitution• open to whole community without open to whole community without

discriminationdiscrimination• organised on an amateur basisorganised on an amateur basis• have main purpose to provide facilities for and have main purpose to provide facilities for and

promote participation in ‘eligible sports(s)’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 communityOpen to the whole community

Membership open to all without Membership open to all without discriminationdiscrimination

Use of facilities available to all Use of facilities available to all members without discriminationmembers without discrimination

Fees set at level that does not present Fees set at level that does not present obstacle to membership or use of obstacle to membership or use of facilitiesfacilities

Organised on an amateur basisOrganised on an amateur basis

Non-profit makingNon-profit making Provides members (and guests) with Provides members (and guests) with

ordinary benefits of local amateur ordinary benefits of local amateur sports clubsports club

On dissolution net assets applied for On dissolution net assets applied for approved sporting or charitable approved sporting or charitable purposespurposes

Main purposeMain purpose

Main purpose must be:Main purpose must be:• to provide facilities for to provide facilities for

eligible sporteligible sport• to encourage participation in to encourage participation in

eligible sporteligible sport

Provision of facilitiesProvision of facilities

Could be facilities owned by clubCould be facilities owned by club Could be facilities hired by club, Could be facilities hired by club,

eg from local authorityeg from local authority Could just be organisational Could just be organisational

infrastructureinfrastructure

Encourage participationEncourage participation

Not enough to just provide facilitiesNot enough to just provide facilities Must encourage participation Must encourage participation

among all membersamong all members If high proportion of social If high proportion of social

members cannot be CASCmembers cannot be CASC Beware ‘social clubs’Beware ‘social clubs’ Beware multi-sports clubsBeware multi-sports clubs

The location conditionThe location condition

Must be in UK or elsewhere in EU or Must be in UK or elsewhere in EU or EEA or in ‘relevant territory’EEA or in ‘relevant territory’

• (EU law requirement!)(EU law requirement!) Must provide facilities in defined Must provide facilities in defined

locationlocation• village, town, neighbourhood, areavillage, town, neighbourhood, area

The management conditionThe management condition

Must be managed by fit and proper personsMust be managed by fit and proper persons ‘‘Authorised official’Authorised official’• chair, secretary, treasurerchair, secretary, treasurer ‘‘Responsible persons’Responsible persons’• other committee members involved in club’s other committee members involved in club’s

managementmanagement CASC must be satisfied that fit and proper CASC must be satisfied that fit and proper

personspersons Ask to read and endorse HMRC guidanceAsk to read and endorse HMRC guidance

Tax reliefs for CASCsTax reliefs for CASCs

No Corporation Tax on:No Corporation Tax on:• profits from trading providing turnover less than profits from trading providing turnover less than

£30k pa£30k pa• income from property, eg lettings, providing less income from property, eg lettings, providing less

than £20k pathan £20k pa• interestinterest• capital gainscapital gains Providing income/gains used for ‘qualifying Providing income/gains used for ‘qualifying

purposes’purposes’

Income from membersIncome from members

Income from members not trading Income from members not trading income so outside scope of Corporation income so outside scope of Corporation TaxTax

Membership feesMembership fees• including joining feesincluding joining fees Sales to members Sales to members • equipment and clothingequipment and clothing• refreshments (including bar sales)refreshments (including bar sales)

Relief for donors: GiftAidRelief for donors: GiftAid

CASCs eligible to GiftAid on donations CASCs eligible to GiftAid on donations received just like charitiesreceived just like charities

Businesses not eligible to GiftAid but Businesses not eligible to GiftAid but can treat donations to CASCs as tax-can treat donations to CASCs as tax-deductibledeductible

Gifts of assets to CASCs exempt from Gifts of assets to CASCs exempt from CGTCGT

Bequests to CASCs exempt from IHTBequests to CASCs exempt from IHT

GiftAidGiftAid

CASC reclaims equivalent of basic-rate CASC reclaims equivalent of basic-rate Income Tax suffered by donor on earnings Income Tax suffered by donor on earnings used to fund donationused to fund donation

Amounts to 25p in the PoundAmounts to 25p in the Pound Higher-rate and additional-rate taxpayers Higher-rate and additional-rate taxpayers

can reclaim more themselvescan reclaim more themselves Difference between higher/additional-rate Difference between higher/additional-rate

and basic-rateand basic-rate

Non-Domestic Rates ReliefNon-Domestic Rates Relief

CASCs eligible to mandatory CASCs eligible to mandatory 80% Rates Relief on premises 80% Rates Relief on premises occupied for purposes of cluboccupied for purposes of club

CASCs only pay 20% of CASCs only pay 20% of normal Non-Domestic Ratesnormal Non-Domestic Rates

VAT and sports clubsVAT and sports clubs

No special rules for CASCsNo special rules for CASCs ‘‘Normal’ VAT rules apply to sports Normal’ VAT rules apply to sports

clubsclubs VAT-registration threshold £77k paVAT-registration threshold £77k pa Can only reclaim VAT incurred if Can only reclaim VAT incurred if

VAT-registered and in connection VAT-registered and in connection with VATable supplies madewith VATable supplies made

VAT and sports clubsVAT and sports clubs

Supply of sports facilities by NPDO exempt Supply of sports facilities by NPDO exempt from VATfrom VAT

Entry fees to sports competition run by Entry fees to sports competition run by NPDO exempt from VATNPDO exempt from VAT

Fundraising events run by NPDO exempt Fundraising events run by NPDO exempt from VATfrom VAT

• fete, bazaar, concert, ball, dinnerfete, bazaar, concert, ball, dinner• fundraising auctionfundraising auction

So over to you….!So over to you….!

Ian M Harris, BA(Hons), FIIT, MAATVAT & Taxation Advice OfficeFinancial Services Division Leicester City CouncilRoom B2.09(B)New Walk CentreTel: 0116-252-7470Fax: 0116-255-2443Mobile/Text: 07980-339581E-Mail: ian.harris@leicester.gov.uk