Dear Colleague,
Update on the Community Amateur Sports Club (CASC) scheme – April 2015
HMRC have finally released the new guidance for CASCs! The guidance has been updated to reflect changes brought about by the new Community Amateur Sports Club regulations which were agreed by Government in March 2015.
Please see the link to the new guidance:
Link to websiteThis new guidance includes:
1. CASC detailed guidance notes (33 pages)
2. Overview of Corporation Tax and Vat rules for CASCs (5 pages)
3. Incorporating an existing CASC into a company (6 pages)
4. Multi-sports clubs (5 pages)
5. Seasonal Sports (2 pages)
6. Model Clauses (2 pages)
It is important that all clubs (both registered CASCs and those considering registering) are aware of the new guidance. All clubs which are CASC's will have to review their circumstances to ensure they continue to qualify; some may have to make changes to stay in the scheme. It is likely most will be able to retain CASC status if they wish to do so. Existing CASCs can leave the scheme during the ‘year of grace’ and not suffer a Capital Gains Tax exit charge if their only reason for leaving is they can’t make the changes to comply with the new rules and they were fully compliant before the 1st April 2015. Clubs will have 12 months from April 2015 to assess their position and take appropriate action. HMRC will be writing individually to every CASC club later this year explaining the situation and options available.
The CASC scheme will continue to be important for many rugby clubs because of tax benefits such as 80% mandatory rate relief, gift aid and corporation tax exemptions which are being improved as a result of the consultation. The improvements are an increase in the corporation tax exempt thresholds from 1st April 2015, the introduction of corporate gift aid for CASC's and a relaxation of payments and expenses which can be provided to players. However the qualifying conditions will be more prescriptive.
The improvements to the scheme
The corporation tax exempt thresholds for CASC's will go up to £50,000pa of gross (i.e. before expenses) trading income and £30,000 pa of gross rental income from 1st April 2015.
Companies have generally been unable to obtain tax relief for donations to CASC's in the past. From 1st April 2014 a company can deduct a donation to a CASC from its taxable profits for corporation tax purposes. Unfortunately this relief operates differently to individual gift aid: there is no tax rebate to the CASC, the company benefits from all of the relief by way of a tax deduction.
From 1st April 2015 player payments will be permitted up to a maximum of £10,000 pa in total for all players (but excluding certain expense payments); subsistence payments will be allowed and tours permitted (both subject to conditions).
Under HMRC's proposed incorporation process CASC's will be able to check with HMRC that the newly incorporated company should be able to register as a CASC before the transfer of the club's activities takes place.
The new conditions
Whilst include-
A new non-member income test under which taxable non-member income cannot exceed £100,000 pa. If this limit is exceeded the club will still be able to stay in the scheme by establishing a trading subsidiary to carry on the non-member activities. There will be the added benefit that if the profits of the subsidiary are donated to the CASC then no corporation tax will be payable on them because of the new corporate gift aid relief.
A limit on membership costs (including membership fees and playing costs e.g. match fees) of £520pa. If this is exceeded clubs must make provision for those who cannot afford £520pa.
Only 50% of members can be non-participating. There is also a new definition of participation. Clubs with a high number of family and parental members will need to consider this very carefully in due course.
Finally as result of the new conditions and income test there is likely to be more record keeping required by HMRC.
What Next?
The RFU are currently working with advisors to ensure that we continue to provide rugby specific information and guidance to assist clubs who are reviewing the new HMRC CASC guidance. Much of this information requires agreement with HMRC that it adheres to the new guidance. We are in the process of agreeing this with HMRC
From 13th May the RFU is aiming to run a series of workshops/ roadshows across the country which will be an opportunity to understand the implications of the new CASC guidance and start to provide and share the RFU guidance that is being developed.
Therefore I would like to invite you attend a relevant workshop evening:
Day
Date
Location
Monday
15 June
Bury St Edmunds RUFC, The GK IPA Haberden, Southgate Green, Bury St Edmunds, Suffolk, IP33 2BL
6:30pm Delegates arrive
7:00pm Start
9:00pm Finish
To book onto a workshop please send the following details to clubenquiries@rfu.com:
names of people attending
name of the club
contact details email and phone number
In the meantime please contact Dave Stubley
davestubley@rfu.com 07736 722387 or Alex Thompson
alexthompson@rfu.com 07894 489756 if you have any queries or require further information.
Yours sincerely,
Dave Stubley
Club Management and Volunteer Manager