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 provided detailed guidance on the new regulations.
The new social membership condition and its impact
As many clubs are aware the potential impact of the new participation criterion is possibly the most difficult aspect of the new scheme for our sport.
The new condition means that clubs must have at least 50% of their membership ‘participating’ on the requisite number of days per year. Those members who do not participate for the requisite number of days a year are classed as social members. A club with more than 50% social membership will be in breach of the scheme.
In order to be a fully participating member, members must participate 12 days per year if a club is open for 12 months of the year. Seasonal clubs are able to pro-rata participation so if a club is open for 8 months of the year the participation rates would be 8.
Participation takes the form of on water activity as well as volunteering, flag officer duties, committee members, working the bar, galley, maintaining club (and own) equipment at the club. Participation impacts on family memberships, as each individual member within a family membership is required to meet the participation condition. This is notwithstanding the fact that family units often include children who are too young to participate or who may only participate when weather conditions are sufficiently suitable.
It also prejudices clubs who expect non-boating parents of participating juniors to join the club in order to help with pastoral care and safe-guarding as they will not be participating and so will be counted as social members. It also impacts on clubs that have members that are no longer able to sail regularly due to age/disability/etc.
RYA Supporters Club Model Template:
In order to avoid being in breach of this condition some clubs wishing to remain within the CASC scheme may need to separate their inactive members from their active members.
We are pleased to report that we are in the process of drawing up template documentation to enable clubs to set up a supporters club to accommodate less active/inactive members in order to avoid breaching the participation threshold. We hope to have the documentation ready by the end of the year. As soon as it is hand we will notify you via Club Room.
De-registration charge and tax penalty
We have produced an Annex to our Guidance dealing with the potential de-registration charge if HMRC de-registers a club because it is in breach of the scheme.
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.
HMRC has published guidance on the grace period and the procedure to de-register.
RYA CASC guidance
We have updated 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 are organising a number of CASC workshops around the regions and would suggest that you contact your RDO to express an interest in a workshop being held in your region.
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 to discuss how the revised conditions are likely to affect them.
Tel: 023 8060 4225
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