The CASC scheme was originally introduced in 2002 and enables amateur sports clubs to register with HMRC and benefit from a preferential tax status.
As readers of Club Room will be aware, the Community Amateur Sports Clubs Regulations 2015 came into force on 1st April 2015.
HMRC have published Detailed Guidance on the regulations.
RYA Supporters Club Model Template
Clubs will recall that we have been working on a Supporters Club Pack which we hope will enable clubs to set up a separate supporters club to accommodate less active/inactive members in order to avoid breaching the new Participation Condition.
We are pleased to announce that we will publish documentation in the Clubs area of the website by the end of January.
We had hoped to publish the documentation before the end of 2015. However, we were forced to approach HMRC on one very important aspect of the Model, namely whether the income received by the CASC from the Supporters Club for its affiliate membership would be classed by HMRC as member income or would fall to be dealt with as non-member income for the purposes of the new Income Condition.
As this aspect of the Model is likely to be critical for some clubs we decided to wait for HMRC’s response before publishing the documentation.
We have now received HMRC’s opinion on the issue and, as expected, it has determined that the income paid by the supporters club to the CASC for its affiliate membership will be classed as non-member income for the purposes of the Income Condition.
This may impact on some clubs that are near their £100k non-member income limit – additionally it may have corporation tax implications if clubs are near the £50k non-member income at which stage non-member income becomes subject to corporation tax.
No doubt there will be clubs who believe they are not likely to be affected by this decision as their income is below the £50k limit for corporation tax purposes and below the absolute maximum of £100k. However, we would urge you to check your income levels and remember that non-member income is defined as income received from anyone NOT having a vote (junior membership excepted) thus income received from honorary/temporary members for example, if they do not have a vote, will be classed as non-member income.
The Amnesty clock is ticking
The amnesty means that existing CASCs have a year of grace, which commenced 1st April 2015, to determine whether they wish to / or indeed can remain in the scheme. Provided existing CASCS notify HMRC of their intention to withdraw from the scheme before 1st April 2016 they will be able to leave the scheme during this year of grace if they wish.
They will not incur a Capital Gains Tax exit charge if their only reason for leaving is not wishing to / not being able to comply with the scheme’s new conditions and they were fully compliant with the rules before 1st April 2015. They will not have to repay the previous year’s 80% mandatory rate relief.
It is important to recognise that if HMRC believe a club is de-registering under the amnesty in circumstances where it had not been fully compliant with the previous CASC rules it may well investigate the club with a resulting Capital Gains Tax penalty.
We therefore recommend that any club considering de-registration contacts Mandy Peters (see contact details below). HMRC has published guidance on the grace period and the procedure to de-register.
If your club is considering leaving the scheme, as well as taking into account the loss of mandatory rate relief, we suggest you consider any corporation tax implications and to that end we have drawn up Corporation Tax Guidance.
RYA CASC Guidance
We are continually updating our own Guidance to help you get to grips with the new conditions and what they mean for your club.
This is an evolving document that we will update regularly following further discussions with HMRC, other NGBs and our own clubs thereby ensuring that we are able to capture as many examples of good practice as possible and reflect them in the Guidance.
We have been holding CASC workshops around each RYA region. If you haven’t had one in your region we suggest you contact your RDO to express an interest in one being held. If you have not already contacted us regarding the changes to the scheme please do so as there may be implications for your club that are not readily apparent from an initial reading of the legislation and guidance.
We would encourage all CASCs to contact Mandy Peters or call 023 8060 4225 to discuss how the revised conditions are likely to affect them.
Local Authority Review of Mandatory Rate Relief
We are aware that some Local Authorities are carrying out a review of registered Community Amateur Sports Clubs (CASCs) entitlement to mandatory rate relief. In order to assess whether an organisation qualifies for mandatory rate relief Local Authorities are requesting evidence such as audited accounts and a breakdown of club membership by category and the amount of membership fees charged for each category.
HMRC have confirmed that Local Authorities have no statutory authority to request such information. We therefore advise clubs not to respond to such requests and to contact us if they receive a request from their Local Authority in relation to their entitlement to mandatory rate relief under the CASC scheme.
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