Augustus Della-Porta - Sport and Recreation Alliance

CASCs and Charities –
What do NGBs need to
25 March 2013
Thea Longley and Augustus Della-Porta
What I will cover:
• Background
For clubs:
• Options – CASC and charity
• Criteria for registration
• Benefits of registration
• Main differences
For NGB’s:
• Options for charitable status
Opportunities for NGBs
• To promote sustainability of clubs.
• Facilitate registration by agreeing model constitution with
HMRC and the Charity Commission.
• Fund clubs via associated charities.
• Register NGB as a charity (if amateur sport only)
• Re: Nottage.
• Encouraging “mere” sport was not charitable.
• Sport was only charitable if it furthered another charitable
objective, eg. health, relief of disability or education.
Background (cont/.)
• CASC introduced to offer sports clubs similar tax reliefs to
charities with lighter touch regulation. Only membership clubs
can apply.
• Charitable status is now available for sports clubs. However,
charitable status is also an option for delivering other sporting
activity, eg. Football Foundation, Rugby Football Foundation,
Kick It Out,.
Options for Clubs
• Three options for sports clubs:
– remain as you are;
– register as a CASC with HMRC; or
– register as a charity with the Charity Commission.
Criteria for Registration - CASCs
• The club must:
– as its main purpose provide facilities and promote participation in
one or more eligible sport;
– be open to all;
– be amateur;
– be established within the EU; and
– have managers that meet HMRC Fit and Proper Person Test.
Criteria for Registration – CASCs (cont/.)
• “Eligible Sport” means those listed by HMRC.
• “Open to the whole community”, ie:
– membership is open to all without discrimination; and
– any fees are set at a level that do not pose a significant obstacle
to membership or use of the club’s facilities.
Criteria for Registration – CASCs (cont/.)
• “Amateur” means:
– players not paid but expenses can be
– player-coaches may be paid;
– non-profit making;
– any net assets on dissolution are to be applied
for approved sporting or charitable purposes;
– it provides the members and guests only with the
ordinary benefits of an amateur sports club.
Criteria for Registration - Charities
• The club must:
– either promote community participation in healthy recreation by
providing facilities for playing sports or advance amateur sport;
– have membership and facilities that are open to all without
– be amateur; and
– be for public benefit.
Criteria for Registration – Charities (cont/.)
• “Healthy recreation”:
– the Charity Commission’s Guidance RR11 currently excludes
certain sports from the list, such as angling, ballooning,
crossbow, flying and gliding (these are not excluded from the
CASC list).
Note: The wording of objects in the constitution is important. The
Charity Commission currently won’t always accept “advancing
amateur sport”
Criteria for Registration – Charities (cont/.)
• “Open membership”:
– similar to that of CASCs. However, a charitable
club cannot have social members. It can only
have non-playing members that help run the
– the bar must be run through a separate trading
subsidiary; and
– it must provide sufficient public benefit which
includes a requirement that “those in poverty
must not be excluded from the opportunity to
Benefits of Registration - CASCs
• CASCs have exemption from Corporation Tax:
– on profits from trading where the turnover of the trade is less than
– on income from property where the gross income is less than
– on interest received; and
– on chargeable gains.
Benefits of Registration – CASCs (cont/.)
• For donors:
– individuals can make gifts to CASCs using Gift Aid;
– relief from IHT on gifts to CASCs;
– businesses can give goods or equipment they make, sell or use
and get relief for their gifts; and
– gifts of charitable assets to CASCs by individuals or companies
are Capital Gains Tax free.
Benefits of Registration – CASCs (cont/.)
• Rates relief:
– 80% mandatory and 20% discretionary rates relief on premises
wholly or mainly occupied by the club.
Benefits of Registration - Charities
• More extensive tax reliefs are available than
for CASCs, these are:
– exemption from Corporation Tax on all profits derived
from fulfilling its charitable purposes;
– exemption from Corporation Tax on profits from noncharitable trading on the lower of 25% of turnover or
– exemption from Corporation Tax on interest received;
– exemption from Corporation Tax on Capital Gains; and
– exemption from Stamp Duty Land Tax on purchases of
Benefits of Registration – Charities (cont/.)
• For donors:
– gifts to charities attract the same reliefs as those for CASCs but,
in addition:
• companies can make gifts to charities under Gift Aid;
• payroll giving;
• Income Tax relief on gifts of shares; and
• some VAT reliefs may be available, such as zero-rating the
construction costs of new buildings.
Main differences between Charities and CASCs
• Regulation:
– CASCs have light touch regulation from
HMRC; and
– charities are more highly regulated by the
Charity Commission.
• Social members:
– CASCs can have up to 50% social members;
– charities can only have non-playing members
that assist with the running of the club.
Main differences between Charities and CASCs (cont.)
• More tax reliefs for charities.
• More types of organisations can register as a charity, eg.
leisure centres and non-membership sports organisations.
• Unlike a CASC a charity must run the bar through a separate
trading company subsidiary.
Changes for the CASC regime
• Treasury/HMRC have announced a review of CASC status
• New legislation in the Autumn
• Consultation is coming- please get involved
Charities for NGBs
• Could the NGB register as a charity?
• What about an associated charity?
What do charities do?
• Education
• Promoting community participation in healthy recreation
• Promoting other charitable purposes [in association with sport]
• Promoting recreation
• Promoting amateur sport (Charities Act 2011)
Advantages of a charity
• Tax relief on donations to the charity
• Attractive to funders
• Expertise
Disadvantages of a charity
• Charity regulation – Charity Commission
• Administration
• Restrictions on activities
Relationship with Governing Body
• Independence
• Corporate relationship
• Funding relationship
• Cross charging
• VAT groups
• Tainted Donation Regulation
Charities Act a (slow) New Dawn?
• Sport
• Amateur
• Charity Commission Guidance in the pipeline
Thea Longley
Augustus Della-Porta
Bates Wells & Braithwaite London LLP
2-6 Cannon Street
London EC4M 6YH
Bates Wells & Braithwaite London LLP
2-6 Cannon Street
London EC4M 6YH
Tel: 020 7551 7777
Fax: 020 7551 7600
Email: [email protected]
Tel: 020 7551 7777
Fax: 020 7551 7600
Email: [email protected]
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