The scheme allows local UK amateur sports clubs to register with HM Revenue and Customs (HMRC) and benefit from a range of tax reliefs, including Gift Aid, where they meet qualifying conditions set out below.
The Benefits of Becoming a CASC
Tax Reliefs Registered CASCs are entitled to certain tax reliefs such as exemption from Corporation Tax on the following but only if all that income is applied for a qualifying purpose that is for providing facilities for and/or promoting eligible sport(s):
- UK trading profits (a CASC is trading if it sells goods or services to non-members) if turnover from that trade is less than £50,000 a year (£30,000 before 1st April 2015)
- UK property income, if the total income from property is less than £30,000 a year (£20,000 before 1st April 2015)
- Interest received
- Chargeable gains
Other benefits
- 25% tax rebate on Gift Aid from qualifying donations (not membership subscriptions or other payments for goods or services)
- 25% tax rebate on Gift Aid small donations (of £20 or less without need for Gift Aid declarations)
- Mandatory 80% charitable rate relief for business rates. There are no specific VAT reliefs for CASCs (unlike charities). CASCs are therefore not eligible for the charity VAT reliefs on purchases of goods and services.
Qualifying Conditions:
- The club’s main purpose must be providing facilities and promoting eligible sport(s).
- Must be non-profit making.
- Membership must be open to the whole community without discrimination and clubs must have affordable membership fees. Clubs with membership fees of over £1,612 a year per individual will be barred from the scheme.
- The costs associated with carrying on the sporting activity at the club must be less than £520 per annum, i.e. Charges for club’s facilities, hiring specialist equipment etc. There are detailed calculations for these purposes.
- Clubs must be organised on an amateur basis which means that players can be paid but the club is subject to an overriding total spend on payments of £10,000 for all players in a 12-month period and limited expenses for travel and subsistence.
- Sale of supply of food and drink –where a club sells food and drink, this should be a social benefit which arises incidentally from the sporting purpose of the club, e.g. when a bar is open for post-match refreshment.
- Members cannot receive income distributions or share in surplus assets on a winding-up of the club.
- Clubs must be set up and provide facilities in an eligible area, i.e. mainly the UK.
- Clubs must be managed by fit and proper persons.
- To meet the main purpose test a club must ensure that at least 50% of the members are ‘participating members’ which entails participating in the sporting activities up to a prescribed threshold.
- CASCs can earn up to £100,000 from non-member trading and property income without losing its status, known as the ‘relevant threshold’ but a trading subsidiary could be considered if this may cause problems. The profits from the subsidiary can then be donated tax free to its CASC parent.
- Non-qualifying expenditure (that is expenditure that isn’t incurred for the purposes of promoting participation or providing facilities for eligible sport) restricts the relief from corporation tax and a corporation tax return and liability will become due.
The above is a summary of the main rules/advantages of CASC status and detailed advice and guidance should be sought before making the decision to apply for CASC status.
These guidance notes provide details of corporation tax which are relevant to community rugby clubs. It is written in general terms and cannot be relied upon to cover specific situations. Clubs are reminded that they should therefore seek their own independent professional advice. The notes have been prepared by Jerroms Business Solutions Ltd and is correct to the best of their knowledge and belief at 30th June 2017.The author takes no responsibility for any consequence of a user or club placing reliance on this guidance.
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