The long awaited response from the Government on the Community Amateur Sports Club (CASC) scheme was published this week following a review of sports responses and continued lobbying and communication with the RFU and other National Sports Governing Bodies.
In short the proposals aim to keep the rules as simple as possible and the main headlines are listed below.
1. Corporation tax exemption thresholds for trading and rental income have been increased to £50k and £30k pa respectively from the current £30k and £20k
2. There will be no limit on the amount of social income that a rugby club can earn from their members but there will be a limit of £100k per year on income from non- members.
3. If clubs are approaching this threshold then they will need to set up a trading subsidiary to deal with the commercial/ social income.
4. Clubs can use the trading subsidiaries to pass up the trading profits to the main club using company gift aid thereby reducing corporation tax liabilities further.
5. They have extended corporate Gift Aid to qualifying gifts of money to CASCs made by any company not just wholly owned subsidiaries (after 1st April 2014)
6. HMRC also acknowledged that they will look at the issue of incorporation to improve and streamline the process for CASC’s wishing to incorporate.
7. Clubs will be able to fund as many players as they like provided the total expenditure does not exceed £10k per year – this will include university students coming home to play and the provision of honorary memberships to long standing volunteers which were all outside of the scope of the original rules.
8. The informal 50% participating members rule will be formalised so that a club will not qualify for the scheme unless it has at least 50% participating members.
9. Further proposals on travel and subsistence and the treatment of tours have been made.
10. Clubs will be able to charge fees of up to £520 per year (this includes any obligatory costs associated with participation – membership subscriptions, playing fees and any equipment mandated by the club). Clubs can charge more than this with an absolute limit on membership fees of £1612 per year provided they can demonstrate that reasonable provision is made for people on low incomes to participate.
The new regulations are subject to approval by Parliament and these should be laid before the House in the New Year following a short technical consultation. The RFU has been invited to contribute to working up more detail on the new guidance.
The full document is here https://www.gov.uk/government/consultations/community-amateur-sports-clubs-casc-scheme and the really helpful part is at page 47-55 where they summarise the new rules HMRC propose to adopt.
As ever the critical issues will be found in the final detail but following these announcements the RFU are positive that the scheme is moving in the right direction and offer improved benefits. As further detail becomes available the RFU will ensure that detailed guidance is available.
Please contact Dave Stubley davestubley@rfu.com 07736722387 for further information.