HMT 3
17 April 2002
SUPPORT FOR COMMUNITY AMATEUR SPORTS CLUBS
Following consultation, the Budget introduces a package of tax reliefs to support community amateur sports clubs (CASCs). The tax package provides an alternative route for CASCs to access tax reliefs on their income and donations from local people, which are similar to the tax reliefs normally given to charities. It will be available for CASCs who cannot or do not wish to apply for charitable status.
In addition to the tax reliefs, the Budget allocates a further £20 million from the Capital Modernisation Fund to renovate and improve community sports facilities.
The Charity Commission will publish tomorrow its revised guidelines for applying for charitable status, reflecting the input of the sports sector. Sports clubs are free to choose to apply either to the Charity Commission for charitable status, and the tax treatment that goes with charitable status, or directly to the Inland Revenue for the tax reliefs specifically for CASCs.
Announcing this package of support, Paul Boateng, Financial Secretary to the Treasury, said:
"Amateur sports clubs are at the heart of sport and community life up and down the country. The Charity Commission's decision to recognise as charitable CASCs that "promote community participation in healthy recreation" will enable many sports clubs to access the valuable tax benefits that go with charitable status. However, the Government wants to ensure that financial benefits reach all sports clubs. The Budget therefore introduces a package of tax reliefs to enable clubs to reduce tax bills on any income and gain additional benefit from donations made by local people. In addition, a further £20 million of capital expenditure will be made available for investing in enhanced community sports facilities. Together these measures provide an unprecedented boost for community sport."
DETAILS
Tax package for CASCs
The tax package is as set out in the November 2001 consultation document, "Promoting Sport in the Community". The main reliefs, available from April 2002 are:
- Fundraising income up to £15,000 exempt from tax;
- Income from interest exempt from tax;
- Rental income up to £10,000 exempt from tax;
- Disposals exempt from capital gains tax;
- Gift aid on individual donations;
- Inheritance tax relief on gifts;
- Gifts of assets on no-gain, no-loss basis for capital gains;
- Business relief on gifts of trading stock.
To benefit, CASCs must be open to the whole community, organised on an amateur basis, and their main purpose must be to provide facilities for, and promote participation in, an eligible sport. Eligible sports will initially be defined with reference to those recognised by national Sports Councils.
£20 million for community sports facilities
To support capital investment to improve public services, the Government set up the Capital Modernisation Fund (CMF) in the Comprehensive Spending Review. The CMF provides capital resources to fund innovative methods of improving the quality of public services across all government departments. Between 1999-00 and 2003-04 the CMF will allocate nearly £5 billion to departments on a competitive basis.
An allocation of £20 million will be made available in 2003-04 for DCMS to distribute, with the help of Sport England. The money will be used to enhance community sports facilities through either major refurbishment or replacement of existing amenities.
Charity Commission guidelines
Revised guidelines for applications for charitable status will be published tomorrow, reflecting input from sports' representative bodies. Full details available from the Charity Commission's Internet site.
NOTES FOR EDITORS
Sports clubs have long sought, in their own words, "parity with charity".
The Chancellor of the Exchequer said in his 2001 Budget statement on 7 March, "At the centre of our communities are also thousands of non-profit sports clubs, and we will now consider the best way for the tax system to give them further support and to recognise their contribution to our community life."
A tax package was prepared in consultation with sports clubs and their representative bodies. At the same time, the Charity Commission's review of its registers concluded that it would recognise as charitable "the promotion of community participation in healthy recreation by the provision of facilities for the playing of particular sports".
On 30 November 2001, a consultation document - 'Promoting Sport in the Community' - was published, announcing the details of a tax package alongside the Charity Commission decision. The consultation process gave sports clubs and their representative bodies an opportunity to reflect on the Charity Commission's decision and say if they thought it would not work for them. Sports bodies have also made representations to the Charity Commission to revise and improve on the guidelines originally published.
A summary of responses to the consultation "Promoting Sport in the Community" is available on this website.
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