Tuesday,
12 November 2002
Charitable
Status and Community Amateur Sports Clubs (CASC)
On
30 November 2001, the Charity Commission announced that it would now
recognise as charitable, “the promotion of community participation
in healthy recreation by the provision of facilities for the playing
of particular sports”. A
sports club cannot be a charity if one of its objectives is the promotion of a
particular sport or sports in general. It may seem evident to clubs
that the promotion of their sport by implication promotes healthy
recreation, but that is not how charity law views it.
The Charity Commission’s remit extends only to England and
Wales.
In
Scotland applications for charitable status are the responsibility
of the Inland Revenue which has agreed to take into account the
guidance issued by the Charity Commission which can be viewed on the
Commission’s web site www.charity-commission.gov.uk
. On 17 April 2002, in
his budget statement, the Chancellor of the Exchequer introduced a
package of tax reliefs to support CASCs as an alternative route for
those CASCs unable or unwilling to apply for charitable status.
Sports clubs are now free to choose to apply for charitable
status and the tax treatment that accrues with it, or for the tax
reliefs specifically for CASCs.
sportscotland offers
information about the two options on its web site www.sportscotland.org.uk
. The general requirements a club needs to meet to be registered as
a CASC are that it:
-
Is
open to the whole community without discrimination;
-
Is
organised on an amateur basis
-
Provides
facilities for, and promotes participation in, an eligible
sport.
Provided
that application for registration is made to the Inland Revenue
before 30 September 2002, and the club can demonstrate that it would
have satisfied the requirements of the Finance Act as at 1 April
2002, tax relief can be backdated until 1 April 2002.
The
tax relief package introduced from April 2002 provides a range of
tax reliefs for CASCs on their income and donations which local
people make to support them. Any
club in Scotland that registers with the Inland Revenue will enjoy
exemption from:
-
Corporation
tax on interest;
-
Corporation
tax on any trading income up to £15,000;
-
Corporation
tax on income from property up to £10,000; and
-
Capital
gains tax on disposals of assets.
Local
people or businesses donating to a registered CASC will be able to
benefit from the following:
-
Gift
Aid for donations of money by individuals, which will increase
the value of the donation by 28% in the club’s hands.
A higher rate taxpayer also gets higher rate relief. For example, giving a cheque for £1,000 costs the doner only
£770, while the club will be able to spend £1,282 – a total
tax incentive of £512;
-
Exemption
from inheritance tax on any bequests to the CASC;
-
Making
gifts of assets to a registered CASC on a no gain/no loss basis
for capital gains purposes for both individuals and companies;
-
Relief
for gifts of trading stock and plant machinery by businesses.
Sports
clubs wishing to apply to register as a CASC should contact the CASC
information helpline administered by the Inland Revenue (Tel: 0131
777 4147, Fax 0131 777 4045). Alternatively
you can write to the Sports Clubs Unit, Inland Revenue, Meldrum
House, 15 Drumsheugh Gardens, Edinburgh EH3 7UN or email sportsunit@gtnet.gov.uk
.
Application forms and
further details of the scheme can also be obtained from the Inland
Revenue’s website at www.inlandrevenue.gov.uk
.
We are aware that Sport England has put in place regional
helpline numbers to assist sports clubs on this issue.
This service provides, in the main, information on the
appropriate contact points and organisations for each of the options
on offer to sports clubs. It
is not our intention to replicate such a service in Scotland as this
news item provides the relevant information and further expertise
appropriately rests with the Inland Revenue.
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