Grants

The taxation of grants depends upon whether the grant was received for a capital or revenue purpose.

Grants for capital expenditure are not normally trading receipts but will reduce qualifying capital expenditure for capital allowances purposes.

A grant received to cover the costs of revenue expenditure will not be taxable, but likewise, the expenditure to which it relates cannot then be deducted as an expense against your other trading income (as the cost was not borne by the club)

Lotteries, raffles, scratch cards

These will need to be operated in accordance with the Gambling Act 2005. If operated by the club at a profit, the income will form part of their trading profits, and will need to be apportioned between the mutual (member) and non-mutual (non-member) sales.

Gaming machines

If the machines are in parts of the club accessible only to members, then the income will be exempt as it will form part of the mutual trade. If accessible to non-members then the income will need to be apportioned, by reference to usage.

Hire of facilities

This is non-mutual income and is therefore taxable.

External Functions

If the club’s facilities are hired out to the general public to raise income, such as a wedding reception or party, then the income will be non-mutual and therefore taxable.

Supporters’ Shops

Much of the over-counter trade is likely to be with members, however if the clubs advertise goods for sale by mail order there is likely to be significant sales to nonmembers.

Any sales with members will be from mutual trading and therefore not taxable. Any sales with non-members will form part of the clubs trading profits and will therefore be taxable.

Advertising

This income is non-mutual and will form part of the trading profits and will therefore be taxable.

Car Parking

Car Parking charges levied to non-members will be taxable.

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.