Definition of CASCs under review and delays explained
The Government has published a ministerial statement concerning the conditions Community Amateur Sports Clubs (CASC) must meet in order to qualify for charity-type tax reliefs designed to help them.
It seems that some of the eligibility rules in the legislation are unclear and cause confusion, making it difficult for clubs and HMRC always to be sure whether a club is entitled to relief.
Provisions will be included in the Finance Bill 2013, to be published on 28 March, allowing clearer detailed rules to be set through secondary legislation. HMRC will then publish a consultation document after the Finance Bill is published setting out proposals for these rules:
"These proposals will cover a range of issues, including:
- The maximum annual fee, to include the costs of participation, which a club can charge and still be considered a CASC. The consultation will seek views on a range of maximum fees up to £1,040 (£20 per week). Recognising that some sports have higher costs, CASCs will be able to charge more than the maximum annual fee if they have measures in place to allow people on low and modest incomes to participate fully at a cost of no more than the maximum fee.
- The rules and limits for CASCs on generating income from social and non-sporting activities will be updated to provide clarity. The consultation will explore a number of possible limits. Where clubs generate income over the limits, the consultation will also explore how clubs can separate this activity into a wholly-owned subsidiary company.
- The consultation will include proposals for more generous rules for travel expenses, and changes to allow clubs to make limited payments to players."
We can expect regulations to be laid in the autumn, setting out detailed rules.
Following any changes, some CASCs may no longer qualify in their existing form and will need to introduce, for example, rules to make allowances for those on low or modest incomes. However, while the consultation is ongoing, CASCs do not need to make any changes.
Those clubs which have been waiting to hear back from HMRC while it has been reviewing the CASC regulations have had their applications put on hold. HMRC is writing to each of those clubs to draw their attention to the proposed changes. It will write again to each club when the consultation document is published explaining how the proposed new rules are likely to affect the club and its application for relief.
One outcome of HMRC’s review of the current rules that does not require legislative change is that clubs can offer junior memberships without voting rights and still qualify as CASCs. We are pleased to announce that HMRC will be applying this rule with immediate effect.