UK: Review Of Community Amateur Sports Club Legislation Announced

Last Updated: 24 April 2013
Article by Bates Wells Braithwaite

HM Treasury has announced that they will be reviewing the legislation relating to Community Amateur Sports Clubs (CASC). The announcement emphasised that the Government's aim is to improve take up of the scheme and clarify the law. This is very good news and the forthcoming consultation is an opportunity that the sector must seize with both hands. The announcement can be found here.

Background

Before 2002 a sports club couldn't register as a charity. CASC status was introduced to provide sports clubs with the opportunity to obtain some of the tax reliefs available to charities without registering as a charity. To everyone's surprise, at the same time that this was announced the Charity Commission changed their policy and allowed the registration of sports clubs as charities. This has meant that since 2002 sports clubs have had 3 options, to remain as they are, to register as a charity or to register with HMRC as a CASC.

To date, CASC status has been more popular with clubs due to a lighter touch regulatory framework and less onerous restrictions on trading. Unlike a charitable sports club which usually needs to operate its bar through a trading subsidiary, a CASC is currently able to operate the bar within the club. Over 6334 Clubs have registered as CASCs and it is estimated that together these clubs have benefited from total cash benefits of £135m to date. Of this figure, 91% is believed to come from rates relief, as CASCs get 80% mandatory rates relief (all figures provided by Tim Baldwin Monthly Analysis of CASC Registrations).

Over the last few years, it has become increasingly clear that parts of the current legislation are no longer appropriate and do not reflect the way that clubs now operate. Issues of interpretation have led to a lack of certainty, changes in HMRC guidance and delays for clubs registering and incorporating. BWB has worked closely with the Sports and Recreation Alliance and major governing bodies (led by the RFU) to lobby HMRC for changes.

Proposals for change

Given the various technical difficulties with the CASC legislation it is welcome news that the Finance Act this year will contain enabling legislation allowing changes to be made by secondary legislation. In their announcement HM Treasury committed to publishing a consultation document prior to making any changes. They flag the following areas for consultation:

  • The annual cost of participation – they are seeking views on whether a maximum annual fee of £1040 (£20 per week) is appropriate, with clubs that charge more having to demonstrate they have measures in place to allow those on low incomes to participate.
  • Rules and limits on CASCs generating income from social and non-sporting activity.
  • Proposals on more generous rules for travel expenses and allowing clubs to make limited payments to players.

The detail will be in the consultation document and this will need careful consideration when it is published. It is also important to note that this is the sector's opportunity to raise any other difficulties that clubs have experienced with the scheme, such as the technical prohibition on clubs fundraising to cover the costs of tours.

What should Clubs and National Governing Bodies (NGBs) do now?

The announcement makes it clear that clubs already registered as CASCs need not do anything for now. All NGBs and clubs (whether registered or not) should however consider engaging with the consultation process. Clubs considering registering as a CASC may wish to wait until the new rules have been implemented.

How can BWB help?

BWB have provided advice to sports clubs on registration and advice to NGBs on providing guidance to clubs. We will be organising a roundtable/seminar, once the consultation document has been published and we will be in touch with you again about that. If you would like to register your interest in attending, please email seminars@bwbllp.com quoting "CASC roundtable".

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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