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Legal Update for April 

Boats in the shallows The deadline for the CASC Amnesty has passed.

As readers of Club Room will know, the ability to officially withdraw from the scheme without tax penalty has come and gone. 

However, at a meeting with HMRC on 31st March 2016 we were advised that as it is dealing with a backlog of post on average 3 weeks old by the time it arrives on the CASC desk, it will continue to de-register clubs without tax penalty up until the end of April.

Therefore, if you need to de-register and haven’t done already DO NOT DELAY and get your de-registration letter in ASAP. 

Clubs that have already de-registered will receive an official Closure Notice notifying it of de-registration by HMRC and advising it that it has 30 days in which to appeal this. 

CASC and Recording Keeping

HMRC have advised that records identifying participation levels at clubs should be kept for 6 years in line with tax law.

Small Business Rate Relief

Sports clubs in England who own their own facilities, whether freehold or leasehold, and pay business rates may be able to take advantage of Small Business Rate Relief (SBRR). This is available if the club occupies only one property with a rateable value of £12,000 or less.

Currently, if the rateable value is less than £6,000, then 100% relief is available. This gradually decreases from 100% until the rateable value reaches £12,000.

From 1 April 2017 the exempt threshold will be permanently doubled, thereby providing 100% relief for clubs with a rateable value of up to £12,000. A further enhancement means that relief will be available on a decreasing scale for clubs with a rateable value of between £12,001 and £15,000.

Importantly, SBRR is not discretionary, it is mandatory. 

Many of our clubs may be eligible for this relief. Indeed this may be particularly relevant to those clubs that have recently de-registered from the Community Amateur Sports Club (CASC) scheme.  

We therefore encourage you to check your rateable value and, if appropriate, apply for the relief. 

More information on the relief can be found on the dedicated website.

Rates - Ability to Pay  

Although from April 2017 many smaller clubs will be eligible for rate relief, rates will continue to be an issue for larger clubs or those who have invested in their facilities and for those whose rateable value moves above the £15,000 threshold.

Valuation Office Agency (VOA) guidance exists which is intended to ensure that rate bills for sports clubs are proportionate and directly connected to the financial position of clubs. However it is not clear to what extent the guidance is taken into account by VOA officials or how aware individual clubs are of its existence.

The guidance establishes that if it can be shown that the only occupier of a sports facility is the club then the rateable value of the clubhouse or ground must reflect that club’s ability to pay. The rating system requires that every property is assessed in its existing physical state and alternative uses are generally ignored. This means for rating purposes a sailing club must be considered as a sailing club.

Applying the guidance can have a significant impact on the assessment of a club. 

It is therefore important that clubs challenge their valuation where they believe it does not reflect their ability to pay. The VOA guidance in paragraphs 2 and 5 (ii) in particular are very useful. 

For further information, or if you have any queries, please contact Mandy Peters. 

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