Local sports clubs, from cricket to curling, can qualify for a variety of tax reliefs by registering as a Community Amateur Sports Club (CASC) or as a charity. The tax advantages can be especially valuable if you have ambitions to develop your clubhouse or other facilities.
Many sports clubs gain tax benefits by registering as a CASC with HM Revenue & Customs (HMRC). You can then claim tax relief on income, gains and profits from some activities; Gift Aid repayment from donations; and business rates relief.
To register as a CASC, your club must:
- promote participation and facilities for eligible sports β this must be the main purpose of the club, regardless of ability
- have a formal Constitution (which should be up-to-date)
- be open to the whole community
- be organised on an amateur basis
Many rugby, cricket and other sports clubs in Scotland gain additional benefits from registering as a charity, rather than a CASC. The tax benefits for charities are more extensive but there is more regulation imposed.
To qualify as a charity, a sports club must promote public participation. This is one of the charitable purposes set out in the Scottish Charities legislation and is a different test from that applied in England.
The additional benefits from being a charity include:
- special VAT treatment in some circumstances
- gifts of quoted shares and land can be made by both individuals and companies with the benefit of income and corporation tax relief respectively
- the ability to raise funds from public grant-making trusts and local government may be easier than for non-charitable bodies.
One major potential advantage of charitable status is in relation to VAT on the construction of buildings. If, for example, your club wishes to develop its clubhouse, it would be worthwhile seeking professional advice on whether you could gain advantageous VAT treatment from being a charity.
If you or your family do play sport locally, itβs well worth looking into whether your club is enjoying the benefits of being a CASC or a charity. Some straightforward legal advice on registration, compliance, governance or constitution could yield excellent results both on and off the pitch.
Please contact a member of our Charities team for more information.