CASC Update

At a recent England Golf CASC Workshop, hosted by Chris Hicks Club Support Manager; Tax Consultant Richard Baldwin, MBE; FCA; CTA, focused on various points concerning the new rules that had been previously raised with HMRC.

On 31st March 2015 HMRC introduced the first substantial changes to the CASC Rules since it was originally introduced in April 2002. The updated legislation can be found in the Corporation Tax Act (CTA) 2010 Part 13 Chapter 9 and Community Amateur Sports Clubs Regulations 2015. CASC registered Clubs have until 31st March 2016 to demonstrate that they meet all the requirements of the new rules to continue with their CASC registration or, if they do not, opt out without penalty. However if HMRC find that a CASC has broken the previous rules they reserve the right to backdate deregistration and apply a charge. Full details can be found in Section 6 of the new guidance notes and HMRC has also produced a recent update.

Several relevant points that should give clubs a better understanding of their eligibility to remain, or become, a CASC were highlighted at the workshop and these are presented below following HMRC’s relevant guidance numbering. More detailed notes on all the recent Golf England CASC Workshops will appear on their website shortly.

Section 2.6 – Does my club charge more than £1,612 a year for membership?

This is the annual cost of the most expensive membership, which includes all mandatory elements (Development Levy, Bar Levy, Union Fees etc) and any Joining Fee. The Joining Fee may be spread over a number of years but every new member must do this to avoid the whole amount being added to the annual cost in any one year. If this annual cost of membership exceeds £1,612 then the club would not be considered to be open to the whole community and could not be a CASC.

Section 2.7 – Costs associated with membership

If the costs associated with membership are over £520 a year then clubs must make provision for those who cannot pay more than this. These costs include membership fees and the additional costs that are incurred which allow the member to fully participate in the club’s activities for the year – see Section 2.7.5. Arrangements for those who cannot pay more than £520 need to be clearly advertised and anyone applying under this provision needs to be able to demonstrate that the full cost of membership would not be affordable to them. It was suggested at the workshop that some local authorities may have a template for drawing up criteria for non-affordability, as some do for their sports facilities, and HMRC is unlikely to challenge these. Follow this link for an example under Types of Discounts.

Section 2.19 – Provide facilities for or promote participation in an eligible sport

The main purpose of the club must be clearly stated in its governing document, or constitution, and must be to provide facilities for, and encourage participation in one or more eligible sports. It should be noted that Foot Golf and other variants are not yet recognised as eligible sports.

Section 2.21 – Social membership threshold and the meaning of participation

A club must ensure that at least 50% of the members are participating members and must keep sufficient records to be able to demonstrate that this is the case. (see Section 2.21 to 2.21.9) In practice a club will now have to prove that at least 50% of members (including Social) play at least 12 times per year.

Section 2.22 – The income condition

Non-member trading should not exceed £100,000 per annum. Non-member income includes everything a visitor spends down to a cup of coffee. It also includes all Social Member income including subscriptions (note how a Social Member is a member for participation but not for income!). If Social Members can vote at General Meetings then their income can be classed as member income. Also if a member pays for his guest’s green fee & drinks etc., then that income can also be discounted. Non-member income will also include facility fees for hosting tournaments and income generated by land fill projects etc.

Section 2.23 – Trading subsidiaries

If your club is already a registered CASC with high levels of non-member trading income and/or property income and you don’t want to be deregistered you may want to consider setting up a trading subsidiary. Any income that is generated by a trading subsidiary will not count towards the club’s income threshold. If you are considering setting up a trading subsidiary you should consider seeking professional accountancy and legal advice. A trading subsidiary should be owned and controlled by the CASC. The trading subsidiary can trade but will not be entitled to any CASC reliefs. Trading subsidiaries owned by CASCs are liable to pay tax on trading profits in the same way as other non-CASC businesses. Trading subsidiaries owned by CASCs may be able to benefit from corporate Gift Aid on any donations made to the CASC and donations made under corporate Gift Aid can reduce the profits chargeable to Corporation Tax. For VAT the trading subsidiary will be treated in the same way as a normal commercial enterprise. This means that green fees transferred to the trading subsidiary will be eligible for VAT at 20%. If the club is incorporated then a VAT group can be formed which will allow retention of any partial exemption. If a club is a CASC and unincorporated it will have to re-apply for CASC if it becomes incorporated.

Section 5 – Leaving the scheme

CASC status is permanent! If HMRC consider that a club is no longer eligible to be a CASC it can be deregistered and HMRC will charge Corporation Tax on a deemed disposal of the Club’s assets at current market value. The charge will be on the increase in value of the assets from 1st April 2016 until the date the Club becomes ineligible and they will include the value of any lease in the calculation.

Section 7 – CASC or charity status

A registered CASC can’t apply to be recognised as a charity. This is set out in the Charities Act 2011 (CA 2011). However, it is open to any sports club which isn’t a registered CASC to apply to the Charity Commission or other charity regulator to be registered as a charity as an alternative to CASC status. Clubs that are considering whether to apply for charitable status shouldn’t apply for CASC status. Where HMRC is satisfied that a club is entitled to be registered as a CASC they have no option but to register upon receiving an application. This would mean that the club would no longer be entitled to be a charity under CA 2011.

If a registered CASC later decided it wanted to become a charity it would need to:

  • set up a new charity
  • register the new charity with the Charity Commission
  • apply for recognition as a charity for tax purposes with HMRC
  • wind up the CASC and transfer assets and activities to the charity
  • inform HMRC that the CASC was closed so that HMRC could deregister the club

There are also different rules for what type of club can become a charity and further information can be obtained from HMRC’s website. When considering whether to apply for CASC status or Charity status you should also be aware that the tax reliefs available to Charities are different from those available to CASCs. A comparison of the benefits of CASC, non-CASC & Charity Status can be found can be found here.

Further information on CASC can also be found on the CASC information website.


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