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Individuals who are UK taxpayers can make monetary gifts to sports clubs that have registered with HM Revenue & Customs (HMRC) as Community Amateur Sports Clubs (CASCs) using Gift Aid in much the same way as they can make gifts to charities.
Gift Aid is available for voluntary donations of money and not for payments for goods and services such as for the personal use of sports facilities. Unlike charities there are no circumstances in which membership subscriptions to a CASC can qualify for Gift Aid. Only voluntary donations from members can count.
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Gift Aid is an easy way to help your CASC maximise the value of its donations, as you can reclaim tax from HMRC on the 'gross' equivalent (its value before tax was deducted) at the basic rate. This is 20 per cent from 6 April 2008. You can work out the amount of tax you can reclaim by dividing the amount donated by four. This means that for every £1 donated, you can claim an extra 25 pence.
For donations made from 6 April 2008 to 5 April 2011 HMRC will automatically pay your CASC a further three pence for every pound 'transitional relief' - to adjust to the fall in basic rate tax (from 22 per cent to 20 per cent).
As well as benefiting your CASC, if donors are higher rate taxpayers, they too can benefit from tax relief as they can claim the difference between the higher rate of tax and the basic rate of tax on the total value of the donations.
Clubs are free to set membership fees at whatever levels they like. To maximise Gift Aid, your club could set a basic membership fee - although it's important to make sure that your membership fees at least cover your running costs. Your CASC could then suggest a voluntary donation on top of the basic fee, which could qualify for Gift Aid - but it must be clear to the person joining that they can join without paying the donation. Anyone who joins the club should have the same access to facilities without paying the extra donation.
For example, if you set your membership at £50 with a suggested (but not compulsory) donation of £30 and someone chooses to give you £80 then £30 could qualify for Gift Aid.
Money raised through fundraising events such as dinners, balls or concerts could also benefit through applying this principle to voluntary donations on top of the ticket/entry price (which wouldn’t qualify for Gift Aid).
The sponsorship of individuals raising funds for the club, for example, running in marathons, completing sponsored swims or taking adventure fundraising events, all qualify in full providing the Gift Aid rules are met.
Your CASC can give donors modest (low value) tokens of appreciation - called 'benefits' - in order to acknowledge a gift but there are limits on their value.
The same benefit rules apply to CASCs as to charities. They are:
Amount of donation
Maximum value of benefits
|£0 - £100||25% of the donation|
|£101 - £1,000||£25|
|£1,001+||Made between 6 April 2007 and 5 April 2011||5% of the donation (up to a maximum of £500)|
|Made on or after 6 April 2011||5% of the donation (up to a maximum of £2,500)|
The benefit limits listed above are for Gift Aid purposes only. If you give a donor a benefit in return for a payment this may be considered a business supply for VAT purposes and VAT may be due on the income.
Find out more on how Gift Aid works, how to make a repayment claim, what records to keep, and how to run an effective Gift Aid scheme in the Gift Aid guides for charities and CASCs.
For more help you can contact our Charities Helpline. Select option 6 for Gift Aid.