Latest News and Changes for CASC's
Significant changes to the CASC (Community Amateur Sports Club) scheme will come into effect next financial year; whilst most are an improvement to the scheme all clubs will need to reassess their membership of the scheme as a result of new qualification conditions.
The detail of the changes to the scheme should be finalised in summer 2014 and will affect all existing CASCs, those that have their applications pending assessment and those clubs which are considering applying for CASC status.
Clubs currently in the scheme and those awaiting a decision on a pending application will have confirmation of the next steps in writing direct from HMRC. The clubs considering the scheme for the first time will be subject to the new criteria.
Background
HMRC's Consultation Document was published on 3rd June 2013 with the consultation closing on 12th August 2013; over 140 responses were received by HMRC. A summary of sport's responses was published on 25th November 2013 together with details of the new rules the Government has decided to introduce and can be found at:
Proposed changes and improvements to the CASC scheme
• An increase in the tax exempt thresholds for trading income (gross) to £50,000pa from £30,000pa and rental income (gross) to £30,000pa from £20,000pa.
• Corporation tax relief will be available after 1st April 2014 to companies making qualifying gifts of money to a CASC subject to certain anti-abuse provisions.
• Participation fees of up to £520 will be allowed (this is any obligatory costs associated with participation e.g. membership subscriptions, playing fees, any equipment mandated by the club). Above this clubs will have to demonstrate that people on low incomes could still participate for £520 or less should they want to. There will also be an absolute cap on membership fees of £1612 per year.
• Clubs will be able to pay players to the tune of £10k per year. Instead of only being able to pay a single player clubs will now be able to pay as many as they want within the £10k threshold.
• Reasonable travel and subsistence payments will now be allowed to away matches. In order to qualify for the subsistence payments (in addition to away travel expenses), club members will have to be travelling for more than 4 hours in a day.
• Clubs can also pay expenses for tours provided sport or training is taking place on at least 75% of the days.
• The informal 50% participating players rule will be formalised so that a club will not qualify for the scheme unless it has at least 50% participating members (this will include volunteers, officials, management committee etc).
• On social income, clubs will be permitted unlimited income from members. As regards non-member income, there will be a limit of £100,000 per year. Any clubs generating income in excess of this will have to set up a trading subsidiary to stay in the scheme.
• Clubs can use their trading subsidiaries to pay players within the £10k annual limit and pass up its trading profits to the main club using company Gift Aid.
• HMRC has also agreed to look at the issue of incorporation to improve the process for CASCs wishing to incorporate.
• The de-registration charge will remain if the qualifying conditions for CASC are broken.
What next?
HMRC continues its dialogue with sport (ECB participates in these discussions) to look at various aspects of the new rules and guidance.
HMRC will continue to accept new applications for CASC status. Existing CASCs will not be approached by HMRC until the new rules have been introduced in summer 2014. Until then there is no need to take any action.
Richard Baldwin - England & Wales Cricket Board - January 2014