Are you involved with a local sports club? If so you will be interested to learn of a series of tax breaks introduced earlier this year.Are you involved with a local sports club? If so you will be interested to learn of a series of tax breaks introduced earlier this year.In simple terms the new rules mean that a ‘Community Amateur Sports Club’ or CASC is exempt from corporation tax on interest, trading income up to £15,000 a year, rental income up to £10,000 a year and any capital gains on sale of the club’s assets. In addition, anyone making donations to the club will be able to benefit from Gift Aid Relief and inheritance tax exemptions.
For some clubs, Gift Aid is likely to be extremely valuable. Gift Aid is a scheme by which you can give a sum of money to the club and the club can reclaim basic rate tax on your gift back from the Inland Revenue. Imagine that your local football club is seeking to build a new club house. It needs to raise £35,000 to do this. If the club is a CASC and donations are made under the Gift Aid scheme it will only need to raise a net sum of £27,300. The balance of £7,700 represents the basic rate tax on these donations and can be claimed back from the Inland Revenue. To the extent that any donations are made by higher rate taxpayers they can claim relief on the difference between the basic and higher rates of tax.
A club must register with the Inland Revenue Sports Club Unit for the above benefits to apply. This is only possible if certain conditions are satisfied including the club being open to the whole community and the facilities being available to members without discrimination.