Find out what income your community amateur sports club (CASC) needs to pay tax on
If your organisation is registered with HM Revenue and Customs (HMRC) as a community amateur sports club (CASC), you need to work out which part of your income to pay tax on.
You could be charged a penalty if you don’t tell HMRC about any taxable income on time.
What counts as taxable income
CASCs are treated as companies for tax purposes, so your CASC will have to pay Corporation Tax on any income or capital gains that don’t qualify for tax relief, eg profits from trading under £50,000 a year (£30,000 before 1 April 2015).
Your CASC needs to spend all of its income and gains on ‘qualifying purposes’ or it will lose some or all of its tax reliefs and the club may get a tax bill. Qualifying purposes means providing facilities for eligible sports and encouraging people to take part in them.
If you’re asked to send in a company tax return, you must complete it and pay any tax due on time.
Your CASC is trading if it sells goods or services to non-members. You’ll have to pay tax on the profits if your turnover is more than £50,000 (£30,000 before 1 April 2015).
It doesn’t count as trading if your club sells goods or services to voting members, eg it runs a bar exclusively for members. In this case, you don’t need to pay tax on profits and the income will not count towards the £50,000 limit (£30,000 before 1 April 2015).
A golf club that’s a registered CASC brings in £28,000 from charging green fees to non-members and uses the income to maintain club facilities. The club doesn’t have to pay Corporation Tax, because the turnover is below £50,000.
A bowling club registered as a CASC has a turnover of £54,000 from selling merchandise to non-members in its shop, making a profit of £8,000. The club pays Corporation Tax on the £8,000 profit because the turnover exceeds the £50,000 limit.
You must complete a tax return to tell HMRC about any trading profits if your CASC’s trading income is more than £30,000. You could be charged a penalty.
You need to pay tax on the profits if you rent out property and the income is more than £30,000 a year (£20,000 before 1 April 2015).
The £30,000 limit can include income from both members and non-members.
Companies wholly owned by a CASC
CASCs can set up wholly-owned subsidiary companies to carry out trading activities that fall outside the tax exemptions available to them. These companies often enter into a Gift Aid arrangement with their parent CASC, under which they agree or contract to pay to the charity a sum of money equivalent to some or all of their taxable profits.
When a CASC owned company makes such a payment it may not be treated as a distribution of profit, but as a qualifying charitable donation under the company Gift Aid rules.
You must pay 20% of the non-domestic rates on your property. CASCs are automatically eligible for a 80% discount.
Selling or giving away an asset
You don’t have to pay tax on any profit from selling assets (eg buildings) as long as all the proceeds are used for qualifying purposes.
You may have to pay Capital Gains Tax if you sell an asset and don’t use the profits for qualifying purposes.
You could also be charged tax if an asset you own stops being used for qualifying purposes.
Your CASC can be deregistered if you transfer an asset to private ownership for free or less than market value, or give your club’s income or assets to a member. You may also have to pay a tax charge on the value of the club’s assets.
You may make money from renting a property that belongs to you. You’ll have to pay tax on the full amount if your income before allowable deductions is more than £20,000 a year.
You must tell HMRC about any profits you’ve made and complete a tax return on time if your income from property is higher than £20,000 a year. If you don’t, you could be charged a penalty.
The rules for whether your CASC needs to register for VAT are the same as for any business. Your club will have to register for VAT if it makes taxable business supplies of goods or services and the turnover is above the VAT registration threshold.
CASCs are treated as companies for tax purposes, so your CASC may have to pay Corporation Tax on any income or capital gains that don’t qualify for tax relief, eg profits from trading under £50,000 (£30,000 before 1 April 2015).
If your CASC needs to pay tax you must:
If you don’t have any tax to pay, you only need to complete a tax return if HMRC asks you to.
CASCs which are also limited companies must send annual accounts to Companies House.
Exemptions and relief
If you’re a registered CASC, you can benefit from tax advantages, by claiming back tax on Gift Aid donations, tax relief on the Corporation Tax you pay on income and capital gains and non-domestic rates relief.
Your CASC needs to spend all of its income and gains on qualifying purposes or it will lose some or all of its tax reliefs and the club may get a tax bill.
Claim tax repayment
If you’re entitled to claim a tax repayment, you need to register with HMRC to be recognised as a CASC.
You’ll need to nominate someone in your CASC to be an ‘authorised official’, eg your treasurer, an employee or a trustee. Authorised officials can submit repayment claims and receive money on behalf of your organisation.
You can choose someone to be a ‘nominee’ like your CASC’s accountant, although this is optional.
You must say who is your authorised official (and nominee if you appoint one) on your CASC application form status. If the authorised official or nominee changes, notify HMRC using form ChV1. Save the form (ChV1) on your computer and complete it on screen. Then print it, sign it and send it to the address on the form.
If you register your club as a CASC part way through an accounting period, the turnover limits for trading and property income are reduced on a pro-rata basis.
There are 3 ways for CASCs to claim tax repayments from HMRC: