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75/02 

25 July 2002

COMMUNITY SPORT IS TAX WINNER

Community sport will benefit as tens of thousands of clubs gain from Government changes to help community amateur sports clubs (CASCs) ease their tax bills.
From today, many CASCs can be better off if they register with the Inland Revenue to claim tax reliefs, which mean:

• 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 assets 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

Welcoming the new tax package for sport in the community, Treasury Minister John Healey said:
?We want to encourage as many people as possible - particularly young people - to take up sport. These measures will make it easier for local sports clubs to offer them the chance.
?Sports clubs play an invaluable role in their communities.  Local people give their time willingly and voluntarily to make these clubs work.  Despite the improved Charity Commission guidance issued in April, not all-amateur sports clubs can apply for the tax benefits of charitable status. The new tax package rectifies this, offering clubs many of the benefits of charitable status.
?I hope that as many clubs as possible will now register for the tax breaks - it is simple to do and could bring huge benefits.?

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Sports Minister Richard Caborn said:
?This is great news for amateur sport. Building on the work done by DCMS, the Charity Commission and Sport England on improved guidance for sport, this package should ensure that no amateur club will miss out on a range of real financial benefits.?

Trevor Brooking CBE, Chairman of Sport England, welcomed the change:

"Combined with the Charity Commission's extension of charitable status, which will also benefit many of these clubs, this tax relief change will benefit grass roots sport.  It will help clubs off the pitch so they can perform better on it."

The Charity Commission announced in November 2001 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". DCMS subsequently worked with the Commission on the improved guidance for sport which was published in April 2002. However, Treasury and DCMS consultation with CASCs and their representative bodies revealed that CASCs who could not, or did not want to, apply for charitable status needed an alternative system of support.
The tax relief package was designed to meet these concerns and ensure that community sport in the UK is put on the best possible basis to encourage and develop local talent.
For a great many clubs, charitable status remains appropriate and offers wider benefits, including:

• mandatory 80 per cent business rate relief
• tax exemption for trading income
• Payroll Giving, and tax reliefs for gifts of shares or land and buildings by individuals and companies

Charitable status can also open up new sources of funding (e.g. grants available from other charities such as community foundations).

NOTES FOR EDITORS

1. In Budget 2001 the Chancellor of the Exchequer announced that: "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."

2. A tax package was prepared following consultation with sports clubs and representative bodies. In November 2001 the Charity Commission agreed to recognise "the promotion of community participation in healthy recreation by the provision of facilities for the playing of particular sports" as a legitimate charitable objective.

3. On 30 November 2001 the Treasury published a consultation document, 'Promoting Sport in the Community', asking clubs whether they felt there was still a case for proceeding with a separate tax relief package.   This gave sports clubs and representative bodies the opportunity to say whether the Charity Commission decision would benefit them and make representations to the Charity Commission to revise and improve the guidelines originally published.

4. Following consultation, Budget 2002 announced the introduction of a package of tax measures giving CASCs access to tax reliefs on income and donations, similar to those available to charities (as set out in the November 2001 consultation document). On the same day, DCMS and the Charity Commission announced improved guidance for amateur sports clubs wishing to apply for charitable status. 

5. The tax package was legislated for in the Finance Bill, which received Royal Assent on 24 July.

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6. A summary of responses to the consultation ?Promoting Sport in the Community? is available on this website.

7. Full guidance for CASCs on how to register to take advantage of the new Government tax package for local sports clubs is available on the Inland Revenue website.

8. The tax relief package will be available to CASCs that:

• are open to the whole community
• are organised on an amateur basis
•  have as their main purpose providing facilities for, and promoting participation in one or more eligible sports.

9. Eligible sports, as recognised by the National Sports Councils, are on the attached list.

10. Media enquiries should be addressed to:
Treasury Press Office     020 7270 5188
Inland Revenue Press Office   0207 438 6692/6706/7327

DCMS Press Office     020 7211 6145/6274
Charity Commission Press Office   020 7674 2332

11. Further information and published documents relating to CASCs may be found  on this site, Inland Revenue website, DCMS website, and the Charity Commission website.
 

LIST OF ACTIVITIES RECOGNISED BY THE SPORTS COUNCILS AT JULY 2002

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Press Notices 2002 July to December index