Community Amateur Sports Clubs –the financial benefits
Around 6,000 clubs in the UK are now registered as Community Amateur Sports Clubs (CASC).
Whilst becoming a CASC is not necessarily the best option for every sports club, it is worth considering the financial benefits which registration can bring.
How to become a CASC
To become a CASC, clubs must:-
- be a recognised sport;
- not discriminate in any way in their membership policies and be wholly open to all sections of the community;
- have a core purpose in the promotion of amateur sports participation;
- be non-profit making and re-invest any profits in the sports club;
- stipulate that in the event of being wound up, any remaining assets be distributed to either the sports governing body for use in community sport, another CASC or charity; and
- ensure that anyone involved in the day-to-day running of the CASC is deemed to be a “fit and proper person”.
The above criteria should appear in the club’s constitution and if clubs are in any doubt regarding any of the criteria, they would be well advised to visit the CASC website (www.cascinfo.co.uk).
If a club wishes to proceed with registration, the next step is to submit an application to Her Majesty’s Revenue & Customs (HMRC) to join the CASC scheme. The HMRC has no option other than to register the club if it is satisfied that the club is “entitled” (i.e. it meets the requirements of the scheme).
Once satisfied with the application, HMRC has discretion to specify any date for registration even where this is before the date of the application.
It is important to note that once a sports club decides to become a CASC, they will always remain a CASC. Should the club decide to withdraw from the scheme at a later date (or if they are found not to be adhering to the criteria), the club runs the risk of being de-registered by HMRC and a Corporation Tax charge may arise. This is because the CASC rules deem the club to have disposed of their property and reacquired everything at market value.
The financial benefits
There are several financial benefits to sports clubs who choose to apply for CASC status.
Firstly, a club with CASC status will enjoy 80% mandatory business rate relief with local authorities having discretionary powers to top this relief up to 100%.
CASCs are exempt from Corporation Tax on profits derived from trading activities so long as their trading income is under £30,000 per annum. In addition, any profits derived from property income are also exempt for CASCs if the gross property income is under £20,000 per annum.
Having CASC status will also allow clubs an opportunity to reclaim tax from HMRC on donations made to the club under Gift Aid in much the same way as charities. For instance, if a club set their membership fees for the year at £50 with a suggested (but not compulsory) donation of £30 and someone chose to pay £80 then £30 would qualify for Gift Aid.
Money which is raised through fundraising events such as dinners, balls or concerts could also benefit through applying this principle on top of the ticket/entry price although it should be noted that strict rules apply.
Is CASC status right for your club?
Ultimately this is a decision which only the club’s committee can make.
Whilst having CASC status does undoubtedly bring with it some considerable financial benefits for sports clubs, we would strongly recommend that clubs fully investigate whether the CASC scheme is right for them before deciding to apply to HMRC to join the scheme.
If you would like to discuss any of this in more detail contact our Sports Desk or Paul Geoghegan, our sports law expert.
