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Community Amateur Sports Clubs (CASC) FAQ
Will we lose sovereignty of the land we own today?
Can we borrow against our land if we become a CASC Club?
Would CASC prevent the Club exercising Commercial decisions that we could today as a non CASC Club?
What about Corporation Tax and Capital Gains Tax?
How else can a CASC registered club benefit from the scheme?
Could the Government withdraw the 80% rate saving if so how uncertain is future given current state of public finances?
The scheme was introduced by not only the Government but also CCPR (Central Council for Physical Recreation) and Sport England. It also has cross party support and the following quotes are from the shadow minsters for sport:
- ‘Grassroots sports is now dramatically underfunded. The CASC scheme is a great way of allowing clubs to reclaim part of their own cash and I would strongly recommend every club to get registered.’ Hugh Robertson Shadow Secretary for Sport – Now Sports Secretary
- Some community clubs are missing out on thousands of pounds each year because they have not registered as a CASC. The scheme ensures that money raised in sport, stays in sport. Don Foster MP Liberal Democrat for Sport
Although the 80% rates relief which is funded centrally by the Government seems like a lot of money to each individual club the total amount that clubs have saved under the scheme is approx £60m. Bearing in mind that the scheme has been in existence since 2002 the amount is very small when comparing with the amount that is handed to charities - £1bn per year and the fact that obesity in the UK is costing the NHS approx £2bn a year and this is expected to rise each year. The Government therefore have a commitment to ensure people are getting more active and also that children have access to 5 hours a week sport. The scheme is therefore something that Government can point to as they know that CASC registered clubs are providing that opportunity.
Of course there can be no guarantee how long the scheme will continue but if any Government changed the rules, with the total amount of registered clubs now standing at 5,667 and each club having an approximate average membership level of 250 it would be deemed political suicide to significantly change any aspects of the scheme that would harm the CASC registered clubs.
Will we lose sovereignty of the land we own today?
All CASC clubs have to have a dissolution clause which states that if the club ever ceased to trade then any proceeds from the asset sales cannot be passed to members. The proceeds can either be used to form another club or can be passed onto a CASC, charity or the EGU. A CASC registered club is still able to use the land as they see fit as long as it does not conflict with the CASC guidance.
Can we borrow against our land if we become a CASC Club?
Becoming a CASC club will not alter the clubs ability to use the club’s property as security for any loans. It remains an arrangement between the club and its members.
What would happen If we sold part of our land either as a CASC club or as an unregistered club, assuming we continue to trade?
Any money raised can be used by the club. If the club was CASC registered there would be no capital gains tax due on any proceeds. If the club was unregistered there would be capital gains tax to pay on the sale of part of the land, subject to any deferral arising from hold over relief where proceeds are re-invested within qualifying assets within the club.
Would CASC prevent the Club exercising Commercial decisions that we could today as a non CASC Club?
CASC status does not affect the way that the club makes commercial decisions in any way.
What about Corporation Tax and Capital Gains Tax?
- a CASC has exemptions from corporation tax for trading income of £30,000 (prior to 1 April 2004 limit was £15,000) and rental income of £20,000 (Prior to 1 April 2004 limit was £10,000). A non CASC club has no exemptions and thus should already be taking into account all non-member income and rental income when calculating the corporation tax to pay.
- a CASC has exemptions from corporation tax on interest received.
- a CASC has exemptions from corporation tax on chargeable gains.
Is it possible to register a private members club as a CASC without the club losing its status as such?
It is acceptable for a club to have rules excluding from membership anyone behaving in a manner inappropriate to the game, where the membership of the person concerned would be likely to be contrary to the best interests of the game or the good conduct and interests of the club. Such rules may be exercised by, for example, requiring new members to serve a probationary period or setting up an appeals committee for anyone refused membership.
The facilities of the club have to be available to all members without discrimination, therefore how does that effect disabled members?
CASC clubs would be expected to comply with the Disability Discrimination Act as all clubs should be doing regardless of if they are a CASC or not.
What is meant by "Fees have to be set at a level that does not pose a significant obstacle to membership or use of the club’s facilities"?
In practice, a club that sets its subscriptions on a basis that does no more than recover reasonable running costs will qualify on this count without difficulty. Therefore, we would expect that most clubs should find that fee and subscription levels will not cause a problem in registering for CASC status. HMRC would not want the club to change its fees if the club ran at a loss which is what would end up happening if the club reduced its fees!
Points to consider are:
- If subscriptions are generally in line with other clubs in the area they are likely to be readily accepted as reasonable.
- If they are significantly more this does not necessarily mean that there is a problem rather that the club must be ready to support the differential if it wishes to register as a CASC. For example a club whose subs are higher might point to the fact that it needs to maintain a higher complement of greens staff so as to maintain its facilities at a high level.
Local authorities are at present fully reimbursed by Central Government for the loss of rates from registered CASC's but could they become more active in looking at compliance if any HMRC arrangements were to change?
Local authorities are in some cases not even aware of the scheme, indeed they often provide sports club a discretionary rates relief which means they incur 25% of that cost locally whereas if they encouraged clubs to become CASC registered all of the relief would be funded centrally thus saving the council money! As long as the central Government is funding the rates relief the councils will not have an issue. The Government and future Governments have got a clear commitment to supporting community sports due to the 2012 Olympics and the legacy it will create.
I have heard that the predominant rules following registration will not be the rules and decisions of the Board of the Club nor of the Members is this correct?
The Club will still have control of its rules and these will be looked at by HMRC at the initial registration process. Any changes necessary will be relayed to the club and will need to be voted in by the members. After registration the club’s members will continue to adhere to the rules as they would have done before CASC status.
How else can a CASC registered club benefit from the scheme?
Only 1 in 10 of CASC registered clubs are utilising the Gift Aid element of the scheme. A CASC club is able to benefit form Gif Aid in the same way as a Charity. For example the senior section made a donation to cover the cost of double glazed UPVC windows. If the cost of this was say £3,000 the club could have reclaimed tax at 28% - £840 on the donation, subject to having the correct paperwork in place.
The Gift Aid principle can be extended to other areas of fund raising and similarly subscription levels could be held at the current level but ask members to pay a voluntary donation instead to cover the ongoing running costs of the club. Plummer Parsons Sports Division can provide much more information on Gift Aid once clubs are registered.
If you would like to talk to someone in the sports team please email sports@plummer-parsons.co.uk or call the office on 01323 431200.
