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East Midlands Chamber News

Clubs given a sporting chance to save money

John Griffin of Newby CatlemanChartered accountants, Newby Castleman is urging amateur sports clubs in Leicestershire to consider signing up to a register which will exempt them from capital gains tax, among other financial benefits.

New rules from HMRC, which came into force on 1 April, mean that Community Amateur Sports Clubs or CASCs can gain even more tax relief on income, capital gains, tax refunds on gift aid donations and business rates relief.

More than 6,500 UK clubs are currently registered, with just 85 from Leicestershire. Cricket, bowls, tennis, football, rugby and golf clubs lead the way but all types of sports are eligible.

John Griffin, Partner at Newby Castleman, which has its head office on Regent Road, Leciester, said: “Many community sports groups are simply not aware that they can make significant savings by operating as a CASC and may fall into the trap of paying taxes they don’t need to.

We have identified a number of our clients who have benefited from the scheme, most notably when they had premises to sell, as CASC registered clubs are exempt from paying tax on capital gains. Additionally, there is no tax if the club has an income of less that £50,000.

The opportunity to claim Gift Aid on donations and use the money to reinvest into the club’s equipment and facilities is also really compelling.

It should be noted that whilst many clubs will and do benefit from CASC registration, it is not right for every club and the decision should be based on professional advice.”

The key benefits of CASC registration include:
•80% mandatory relief on business rates. Local authorities can offer an additional 20% relief to community sports clubs but it is entirely at their discretion.
•The ability to raise funds from individual donations under Gift Aid. A registered CASC can reclaim up to 25p in tax for every £1 donated.
•Tax free income from bank interest and capital gains. CASCs are exempt from Corporation Tax on profits derived from trading activities if their trading income is under £50,000 per year.
•Profits derived from property income are also exempt for CASCs if gross property income is under £30,000 per year.
•CASCs whose income does not exceed these thresholds will no longer be required to complete an annual Corporation Tax return.