CASC’s and charities – the tax benefits
The 20th Anniversary of the introduction of the CASC scheme on 1st April is a timely reminder of how valuable registration as a CASC has been. The annual cash injection for CASC’s has been estimated at just over £40 million and average cash benefits estimated at around £5,500 per annum per CASC.
In late 2001, slightly earlier than the introduction of CASC’s, the Charity Commission in England & Wales accepted that community sports clubs promoting community participation in healthy recreation through amateur sport could register as charities, an alternative route to access tax benefits.
The last 20 years are likely to have provided significant cash for sailing clubs registered under either route; registration has been particularly valuable over the last 2 years for those clubs in receipt of Coronavirus business support grants from their Local Authority. Exemption from corporation tax is likely to be available on these grants when received by registered clubs. Unregistered clubs, whether incorporated as companies or not, face corporation tax liabilities and associated online filing requirements in relation to these grants (see Club Room article December 2021 issue “Taxation of coronavirus grants” Taxation of coronavirus grants (rya.org.uk)
Corporation tax exemptions for CASC’s and charities are not the only tax benefits. Registered clubs get 80% mandatory business rate relief and can use both gift aid and the Gift Aid Small Donations Scheme on qualifying individual donations. Rate relief means that in 2022/23 registered clubs benefit from mandatory rate relief and the 50% discount available for those in the Hospitality and Leisure sector. Overall CASC and charity rate bills are reduced therefore by 90% for this year.
Gift aid continues to support registered clubs particularly those embarking on facility improvement projects. Individual qualifying donations provide a 25% cash rebate to the club from HMRC and tax rebates to the individual donors if they are higher or additional rate income tax payers. HMRC are keen to promote the use of gift aid and issued a Press Release to coincide with the last Sport Relief fund raising event in March 2020. Salisbury Rugby Club, a CASC, provided a testimonial, which HMRC used, stating that “Gift aid contributed almost £25,000 [towards new changing rooms]: we couldn’t have been successful without it”.
It is recommended that sailing clubs registered as CASC’s or charities take full advantage of their registered status including making use of gift aid. Unregistered clubs may wish to consider registration as a CASC or charity Legal structure of your club (rya.org.uk)
RYA affiliated clubs have access to tax consultant, Richard Baldwin MBE; FCA; CTA; we provide a free 30 minute consultation with Richard which can be accessed via the Legal Department.