15 December 2015


New rules on Community Amateur Sports Clubs status, most notably on professionalism and membership, were introduced in April this year, and many cricket clubs could be adversely affected if no action is taken by March 2016.

Tait Walker, chartered accountants based in the north east, have issued a guide to explain the changes and identify traps for the unwary while offering a few tips.

Community Amateur Sports Clubs, known as CASC, was a status set up with good intentions by the Government in 2002 to ease the burden of tax and rates on grassroots sport. The importance of sport participation was underlined by the success of the London Olympics in 2012, and the role of local clubs was acknowledged.

The problem was that the status rules were not clear-cut. Clubs and the tax authorities (HMRC) could not always be sure whether a club was entitled to register, not helped by occasional abuses of the system. Apparently, if clubs were assessed now under the previous CASC rules, HMRC believe a lot would not qualify.

According to Tait Walker, the new rules are clearer and are not expected to change in the foreseeable future. CASC clubs have until 31 March 2016 to comply  or be deregistered.

One new rule that might affect many cricket clubs is that they must have at least 50 per cent of their members “participating” - a potential issue if there is sizeable social or family membership.

The virtual ban on professionalism has been relaxed. The CASC rules prevented clubs from making any payments to  players or rewarding performance before 1 April 2015. The new requirements allow a total combined limit of £10,000 in cash and benefits, excluding reasonable expenses, and HMRC say the restriction relates to payments only for playing and not for coaching, for example. To meet the requirement, separate records - or two contracts – should be kept for coaching and playing.

On membership participation, before 2015 there were no hard rules on social members, but the HMRC used to suggest that if over half did not participate at the club, it was most likely “not encouraging members to do so” and therefore would not be a CASC. From 2015 social membership was defined more closely, so that 50 per cent of total membership must “participate” for at least 12 separate days a year – pro rata for seasonal sports. Participation could include volunteer coaching, officiating or groundsman work.

Tait Walker reckon that this membership question could affect most clubs. They suggest that clubs, even if all members are likely to play, need to have a tracking system to demonstrate participation, for example by filling out a tick box on a membership form saying “I will participate at least 12 times a year”.
HMRC would expect good records of participation such as a signing-in book for members, records of training courses attended and clear playing lists.

Many clubs have significant family membership, perhaps parents who watch but do not play. Tait Walker suggest creating a supporters club as a separate entity and donating to the CASC club, using Gift Aid for funds in excess of running costs. The supporters club could still have representatives on the committee of the CASC club if desired.

Another rule is that turnover from “non-members” is not supposed to exceed £100,000 per year when all other income such as bar and catering is taken into account. The total income limited in this way might accrue from social membership, functions, trading and incoming rentals. Tait Walker suggest moving non-qualifying income to a trading subsidiary, which could grow beyond £100,000 without endangering CASC status. But accurate qualifying approval from HMRC  would be needed for such a structure often used by charities.

Membership fees before 2015 had to be set at reasonable levels for CASC status, within reach of the wider community, but new rules add numbers. Maximum cost of participation must be £520, including equipment hire and match fees. Above this £10 per week figure, clubs will be required to make provision to ensure that those who are unable to afford higher costs can fully participate to an upper annual level of £1,612. But all this is unlikely to affect cricket clubs.

For most clubs, CASC status saves money. There is access to Gift Aid, mandatory 80 per cent business rate relief, corporation tax exemptions and Capital Gains exemption when selling land. Other factors to be considered include VAT efficiency, legal issues, employees, license terms and permissions required. It would be worth consulting experts such as Tait Walker.

http://www.taitwalker.co.uk/specialist-sectors/not-for-profit/amateur-sports-clubs/

http://www.ecb.co.uk/information/community-amateur-sports-clubs-cascs-0

http://www.sportenglandclubmatters.com/club-planning/club-structure/casc/

https://www.gov.uk/government/publications/community-amateur-sports-clubs-detailed-guidance-notes