Amateur sports clubs could be thousands of pounds better off after the introduction of new legislation.
The Finance Bill was published on Thursday and details how sports clubs charging membership fees of up to £1,040 a year can register for the Community Amateur Sports Club scheme (CASC).
CASC status allows a club charity-like tax breaks such as claiming back Gift Aid on donations as well as business rates relief and corporation tax exemptions.
So far only 6,334 of the UK's 40,000 sports are registered for the scheme; these clubs have saved £140 million in taxes since 2002 by involvement in the scheme.
The Sport and Recreation Alliance represents over 300 sports bodies and 150,000 clubs. They answer our questions about the Community Amateur Sports Club scheme
Why have only 600 clubs registered so far when the benefits are so good?
Some of the current rules around CASC registration are unclear and cause confusion, which has put many clubs off from applying in the past.
However the government publicly supported the CASC scheme in this month's Budget and is working to make improvements that should come into effect in autumn.
With around 150,000 sports clubs in the UK there's massive potential for lots more to apply for CASC status and make thousands of pounds in savings which can be reinvested in facilities, coaching and developing players.
What is the purpose of the CASC scheme?
Sports clubs play a valuable role in their communities and many are run solely by volunteers, operating often at a loss. It can be too complicated for clubs to register as charities so the CASC scheme was created to combat that. The scheme is supposed to ensure genuine community clubs don't pay the same rates and taxes as a business would. The aim is to ensure cash is kept in the clubs so facilities can be maintained and clubs have a greater chance of survival.
How does a club benefit?
The scheme has two main benefits for amateur sports clubs:
• 80% mandatory business rate relief
• Gift Aid on donations - a registered CASC can reclaim up to £25 in tax for every £100 given.
CASC clubs who fundraise thousands of pounds can claim hundreds of pounds back in Gift Aid - over £12.4 million in Gift Aid has been repaid to CASCs by HMRC to date.
Property owning CASC status clubs claiming business rate reliefs can save thousands of pounds a year - money which can be used to reinvest back into the club.
Many local councils are withdrawing business rate relief from sports clubs, which can send some clubs under. However under the scheme they can arrange to pay less tax to the local councils.
How does a club know if it is eligible?
All grassroots sports clubs can register to become a CASC provided that:
• their main purpose is to promote amateur sport
• they are not for profit (all profits go back into the club)
• they are open to the whole community
• membership and participation fees are reasonable
• they do not pay their players (although forthcoming consultation is seeking to relax this somewhat).