In this section:
Tax relief for Community Amateur Sports Clubs
If your sports club is registered with HM Revenue & Customs (HMRC) as a Community Amateur Sports Club (CASC), you may qualify for a number of tax advantages - known as tax exemptions and tax reliefs - on income, gains and on profits from some activities. These include claiming back tax on Gift Aid donations, and relief on Corporation Tax and on non-domestic rates.
However - this doesn't mean that your club won't ever have to pay any tax - some income may remain taxable.
This guide outlines the tax reliefs available to CASCs and how to claim
them.
On this page:
- Corporation Tax relief
- Relief on non - domestic rates
- Claiming tax back on Gift Aid and other income
- Restrictions on tax relief-non - qualifying expenditure
- VAT and CASCs
- Completing a tax return
- Contacting the HMRC Charities Helpline
- More useful links
Corporation Tax relief
Sports clubs are liable to pay Corporation Tax on their profits. Sports club profits include all income and any capital gains made.
If your sports club is registered as a CASC it may be able to get tax reliefs to reduce its Corporation Tax bill. These reliefs include not having to pay tax on:
- trading profits, if the turnover is no more than £30,000 per year
- income from letting property, if the rent is no more than £20,000 per year
- any interest your CASC gets
- any capital gains it makes
- any Gift Aid donations
Conditions for being able to claim tax relief
Your club must use its income for 'qualifying purposes' to be able to claim the full amount of the relief. Qualifying purposes are providing facilities for eligible sports and encouraging people to take part in them. If your club spends some of its income on non-qualifying purposes the reliefs will be restricted and you may end up with a tax bill. To find out more see section below 'Restrictions on relief - non qualifying expenditure'.
Find out more about tax on CASC trading and business activity
Non-trading activity
If your CASC provides goods and services for club members - for example, a bar for their exclusive use - this doesn’t count as trading, therefore any profits made aren’t taxable.
If your CASC exceeds the trading or property income limits
If your CASCs overall income (turnover) from trading activities is more than £30,000, or your rental income before allowable deductions is over £20,000, you won't get any tax relief for these types of income. In these cases you'll have to pay tax on the full amount after allowable deductions.
Example 1
Your CASC has turnover of £10,000 from trading activities, rental income of £15,000 and interest of £500. You use all the income for maintaining the club facilities. The club doesn't have to pay tax on any of its income because the trading and rental incomes are below the limits.
Example 2
Your CASC has turnover of £40,000 from trading activities, giving a profit of £6,000. You have to pay tax on the whole £6,000 profit because the turnover is more than the £30,000 limit. Your CASC also has gross rental income of £12,000, net £4,000 after deducting expenses. You don't have to pay any tax on the rental income because the gross rents are below the £20,000 limit.
For more information on tax relief on trading profits, see the link at the end of this section ‘Find out more about tax on CASC trading and business activity’.
Relief on non-domestic rates
If your CASC is based in England or Wales, you'll get 80 per cent rates relief if the club's property is used wholly or mainly for the purposes of:
- your club
- another CASC-registered club
This means you'll only have to pay 20 per cent of the non-domestic rates. CASCs in Scotland get the same relief.
This relief is 'mandatory' - Local Authorities must give it. HMRC doesn't deal with rates or rates relief. If you need to find out more about paying non-domestic rates, you'll need to contact your local authority finance department.
Get your local authority contact details from the Directgov website (Opens new window)
Claiming tax back on Gift Aid and other income
Gift Aid
Gift Aid is a way for your CASC to increase the value of monetary gifts from UK taxpayers made to your club at no extra cost to the donor.
As long as the rules of the Gift Aid scheme are met, your club can claim back basic rate tax on donations made by individuals.
You can only use the Gift Aid scheme for voluntary donations. You can't use it to claim tax back on:
- payments for goods and services - for example the personal use of sports facilities
- membership subscriptions
To claim tax back on Gift Aid donations - see the link at the end of the next section 'Find out how to reclaim tax on Gift Aid and other income'.
Find out more about Gift Aid for CASCs
Other income
Some income has tax taken off before you get it. If your club is registered as a CASC you may be able to claim tax back on income that's already been taxed. This includes interest from banks or building societies that had tax taken off before it was paid.
Your club doesn't have to fill in a Company Tax Return to claim back the tax. When you register as a CASC, HMRC will send you a form for claiming back tax on Gift Aid and other income that’s already had tax deducted, for example on bank and building society interest.
Find out how to reclaim tax on Gift Aid and on other income
Restrictions on tax relief - non-qualifying expenditure
Your club must use its income for 'qualifying purposes' to be able to claim full relief from tax. Qualifying purposes are providing facilities for eligible sports and encouraging people to take part in them.
If your club uses any of its income or gains for non-qualifying purposes - sometimes known as 'non-qualifying expenditure' - the reliefs will be restricted and you may end up with a tax bill.
Example 3
Your club is registered as a CASC. Its income for the last accounting period was made up as follows:
| Type of income: | Amount |
|---|---|
| Bank interest | £6,000 |
| Income from property (gross - before expenses) | £5,000 |
| Gift Aid income | £15,000 |
| Total income apart from membership fees | £26,000 |
| Membership fees | £5,000 |
| Total income including membership fees | £31,000 |
During the accounting period your club spent £7,000 on a non-qualifying purpose.
To work out the amount of income that can be covered by the relief:
- multiply the amount spent on a non-qualifying purpose by the club’s overall income in the tax year excluding membership fees
- divide the result by the overall income including membership fees
- deduct the figure at 2 from the total income excluding membership fees
- the result is the amount on which you must pay tax
Using the example in the table above, this works as follows:
£26,000 - (£7,000 x £26,000/£31,000) = £20,130
The club has to pay tax on the balance, £5,870. It doesn't have to pay any tax on the membership fees - these aren't taxable.
Find out which activities are recognised as eligible sports
VAT and CASCs
Whilst your club may get various tax reliefs if it's registered as a CASC, unlike charities there are no specific VAT reliefs. However, your club may qualify for a VAT exemption for fundraising events and certain sporting activities.
The rules for whether your CASC needs to register for VAT are the same as for any business.
Find out more about how VAT applies to CASCs
Completing a tax return
If your club receives or you think it may receive income or capital gains that are not exempt from tax, or which exceed the turnover limit for the exemption - such as on trading profits and property income - you must tell HMRC Charities.
You should also tell HMRC when you use income for non-qualifying purposes. Qualifying purposes are providing facilities for eligible sports and encouraging people to take part in them. If income is used for non-qualifying purposes, the usual tax relief or exemption may be subject to restrictions and this may result in a tax bill.
In either case you will need to complete a tax return. The most efficient way you can do this is online.
CASCs are regarded as companies for tax purposes, so your CASC may have to pay Corporation Tax on its profits. If you’re asked to send in a Company Tax Return you must complete it and pay any tax due on time.
If your CASC doesn’t tell HMRC about non-exempt income or expenditure on time, or fails to complete a tax return on time, it may have to pay penalties.
Find out more about completing your Company Tax Return
Contacting the HMRC Charities Helpline
For more help you can contact the Charities Helpline on Tel 0845 302 0203 (open from 8.00 am to 5.00 pm, Monday to Friday). Select option 4 for CASCs.
More useful links
Registering as a Community Amateur Sports Club with HMRC
Read more about tax reliefs in the guidance notes for CASCs
Find out more about being a CASC on the CASCinfo website (Opens new window)
