1. Background of Community Amateur Sports Clubs (CASCs) scheme
The Government introduced the CASC programme in 2002 as they recognised the important role played by amateur sports clubs in local communities. CASC allows clubs to access many of the benefits of charitable status without the accompanying administrative responsibilities and replacing this with what is termed ‘light touch regulation’ for CASCs. CASCs have to register with Her Majesty’s Revenue and Customs (HMRC) and have to adhere to a number of set criteria that both incorporated and unincorporated clubs can potentially meet.
At March 2013 there were 620 football clubs registered as CASCs in the UK and it is estimated to generate £2 million worth of savings and income generation per annum to those clubs.
2. What are the benefits?
CASCs benefit from a range of tax reliefs, including receiving money through Gift Aid and business rate relief. This means that as a CASC:
- For every £1 raised in fundraising a club could receive an additional 25p through Gift Aid.
- If a club pays non domestic rates it will receive 80% mandatory rate relief.
- Is exempt from corporation tax if it generates trading turnover less than £30,000 pa.
- Individuals do not pay inheritance tax on gifts to the club.
3. What are the restrictions?
For many football clubs that own or lease facilities some of the largest barriers are:
- Clubs can’t pay players other than away travel expenses, so this is not appropriate for clubs paying players or wishing to progress up through the National League System in the future.
- Once a CASC always a CASC (unless in exceptional circumstances e.g. conversion to charity).
- A CASC must have more participating members than social members.
- Members can’t financially benefit from the club, any profits must be reinvested in the club (not for profit).
For a full breakdown of the requirements see: http://www.thefa.com/my-football/football-volunteers/runningaclub/casc/casc-intro
4. Overview of proposed changes
Significant changes to the CASC scheme will come into effect next financial year; whilst some are an improvement to the scheme, all clubs will need to reassess their membership of the scheme as a result of new qualification conditions introduced following an HMRC consultation. The detail of the changes to the scheme should be finalised in summer 2014 and will affect all existing CASCs, those that have their applications pending assessment and those clubs which are considering applying for CASC status. Clubs currently in the scheme and those awaiting a decision on a pending application will have confirmation of the next steps in writing direct from HMRC. The clubs considering the scheme for the first time will be subject to the new criteria.
5. Background of consultation on CASC
HMRC's Consultation Document was published on 3rd June 2013 with the consultation closing on 12th August 2013; over 140 responses were received by HMRC. A summary of sport's responses was 2
published on 25th November 2013 together with details of the new rules the Government has decided to introduce and can be found at:
6. Proposed changes to the CASC scheme that may affect Football Clubs
- Clubs will be able to reward players to the collective total of £10,000 per year (this includes paying players and the cost of expenses/benefits).
- Reasonable travel and subsistence payments will now be allowed to away matches. In order to qualify for the subsistence payments (in addition to away travel expenses), club members will have to be travelling for more than 4 hours in a day.
- An increase in the tax exempt thresholds for trading income (gross) to £50,000pa from £30,000pa and rental income (gross) to £30,000pa from £20,000pa.
- Clubs can also pay expenses for tours provided sport or training is taking place on at least 75% of the days.
- The informal 50% participating players rule will be formalised so that a club will not qualify for the scheme unless it has at least 50% participating members (this will include volunteers, officials, management committee etc).
- On social income, clubs will be permitted unlimited income from members. As regards non-member income, there will be a limit of £100,000 per year. Any clubs generating income in excess of this will have to set up a trading subsidiary to stay in the scheme.
- Clubs can use their trading subsidiaries to pay players within the £10,000 annual limit and pass up its trading profits to the main club using company Gift Aid.
- The de-registration charge will remain if the qualifying conditions for CASC are broken.
7. Other Proposed Changes possibly less relevant for Football Clubs
- Corporation tax relief will be available after 1st April 2014 to companies making qualifying gifts of money to a CASC subject to certain anti-abuse provisions.
- Participation fees of up to £520pa will be allowed (this is any obligatory costs associated with participation e.g. membership subscriptions, playing fees, any equipment mandated by the club). Above this clubs will have to demonstrate that people on low incomes could still participate for £520 or less should they want to. There will also be an absolute cap on membership fees of £1,612 per year.
- HMRC has also agreed to look at the issue of incorporation to improve the process for CASCs wishing to incorporate.
8. What next?
HMRC continues its dialogue with sport (The FA participates in these discussions) to look at various aspects of the new rules and guidance.
HMRC will continue to accept new applications for CASC status. Existing CASCs will not be approached by HMRC until the new rules have been introduced in summer 2014.
Until then existing CASCs should consider ways to fundraise to generate income for their club and claim an extra 25p in the £1 in Gift Aid (certain conditions have to be met in order for the donation to qualify for Gift Aid). The Government is actively encouraging the use of Gift Aid.
For further information contact Richard Baldwin on 01494 730059 or CASChelp@TheFA.com.
Please find a list of CASC resources below.