Community Amateur Sports Clubs: Guidance Notes

Contents

1. Introduction
2. This Guidance
3. Community Amateur Sports Clubs (CASCs)

Annex 1 List of activities recognised by the Sports Councils at July 2002 Annex 2 Multi Sports Clubs Annex 3 Changes to Guidance since 1 November 2004 Appendix 1 CASC - Application form (PDF 118K)
Appendix 2 CASC - model Gift Aid declaration (PDF 8K)

1. Introduction

1.1.1With effect from April 2002 many local amateur sports clubs will be able to register with the HM Revenue & Customs as Community Amateur Sports Clubs (CASCs) and benefit from a range of tax reliefs, including Gift Aid.

2. This Guidance

2.1.1 This guidance is intended to help sports clubs and their supporters understand the new rules and take advantage of the scheme announced in Budget 2002. It explains the rules that apply to clubs that want to register as CASCs with HM Revenue & Customs. It does not deal with the requirements that clubs need to satisfy to secure registration as a charity.

2.1.2 Details of the legislation can be found in Schedule 18, Finance Act 2002.

3. Community Amateur Sports Clubs (CASCs)

3.1 What kind of club can register as a CASC?

3.1.1 Sports clubs that are formally constituted and that meet certain requirements will be able to register.

3.1.2 The definition of a CASC is set out in the legislation. It is designed to give relief to clubs 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

3.1.3 Your club will not qualify if, for example:

  • the sports councils do not recognise the sport in which the club is engaged,
  • where your facilities are controlled by a Ltd Company, which is separate from the sports club then only the underlying sports club can register,
  • you do not have your own membership,
  • you provide facilities for others, but do not promote and encourage the sport for your own membership,
  • your main purpose is not the provision of facilities for and promotion of participation in an eligible sport.

3.1.4 If your club is a multi-sports club you should refer to Annex 2 - Multi Sports Club that provides further guidance on the types of structure that may qualify for CASC status.

3.2 Open to the whole community

3.2.1 A club is open to the whole community if:

  • membership of the club is open to all without discrimination
  • the club's facilities are available to members without discrimination, and
  • any fees are set at a level that does not pose a significant obstacle to membership or use of the club's facilities

3.3 Discrimination

3.3.1 Discrimination includes indirect discrimination and includes:

  • discrimination on grounds of ethnicity, nationality, sexual orientation, religion or beliefs
  • discrimination on grounds of sex, age or disability, except as a necessary consequence of the requirements of a particular sport

3.3.2 This does not prevent a club from having different classes of membership depending on:

  • the age of the member
  • whether the member is a student
  • whether the member is waged or unwaged
  • whether the member is a playing or a non-playing member
  • how far from the club the member lives or
  • any restriction on the days or times when the member has access to the club's facilities

3.3.3 If a club effectively discriminates by only accepting members who have already reached a certain standard, rather than seeking to promote the attainment of excellence by enhancing access and the development of sporting aptitude, then it does not have an open membership policy. So, a club selecting members on the basis of existing attainment would not come within the CASC requirements.

3.3.4 Clubs can refuse or revoke membership, on non-discriminatory grounds, where the membership, or continued membership of the person concerned would be likely to be contrary to the best interests of the sport or the good conduct and interests of the club

3.3.5 Although clubs should be open to all without discrimination, single sex clubs may be permitted where such restrictions are not discriminatory in intent but a genuine result of physical restraints (such as changing room facilities) or the requirements of the sport.

3.4 Level of fees

3.4.1 A club's fees should be set at such a level that does not pose a significant obstacle to membership or use of facilities. The legislation does not specify what an acceptable level is, however clubs should bear in mind that the object of the scheme is to enable all of the community to participate in sports. So fees must be set at a level that most members of the community are able to afford.

3.4.2 Some sports, for example offshore yacht racing or polo, are inherently expensive and that tends to restrict participation. Clubs involved with inherently expensive sports that want to register as CASCs will need to be able to demonstrate that membership and participation is within the financial reach of the wider community. This might be achieved by using other income to cross-subsidise fees or by the club making club-owned equipment available for use by members at reduced rates.

3.4.3 Example. Dinghy sailing does not require significant wealth, but even a basic second-hand boat and safety equipment can cost several hundred pounds. If a club required all members to own their own boats this would present a significant obstacle to membership for many people. However, if the club made a boat and equipment available to members for hire at modest rates this obstacle would be removed.

3.5 Organised on an amateur basis

3.5.1 A club is organised on an amateur basis if:

  • it is non-profit making
  • it provides for members and their guests only the ordinary benefits of an amateur sports club, and
  • its governing document requires any net assets on the dissolution of the club to be applied for approved sporting or charitable purposes

3.6 Non-profit making

3.6.1 A club is non-profit making if its governing document requires any surplus income or gains to be reinvested in the club. Surpluses or assets cannot be distributed to members or third parties.

3.6.2 This does not prevent donations by the club to charities or to other clubs that are registered as community amateur sports clubs.

3.7 Ordinary benefits of an amateur sports club

3.7.1 The ordinary benefits of an amateur sports club are:

  • provision of sporting facilities
  • reasonable provision and maintenance of club-owned sports equipment
  • provision of suitably qualified coaches
  • provision, or reimbursement of the costs, of coaching courses
  • provision of insurance cover
  • provision of medical treatment
  • reimbursement of reasonable travel expenses incurred by players and officials travelling to away matches
  • reasonable provision of post-match refreshments for players and match officials
  • sale or supply of food or drink as a social adjunct to the sporting purposes of the club

3.8 Application of assets on dissolution

3.8.1 The governing document of the club should make it clear how its assets will be applied in the event of dissolution. The CASC legislation requires that the assets be applied for approved sporting or charitable purposes. The term “approved sporting or charitable purposes” means any of the following as may be approved by the members of the club in general meeting or by the members of the club’s governing body:

  • the purposes of the sport’s governing body for use in related community sport,
  • the purposes of another CASC,
  • the purposes of a charity.

3.8.2 Even small, seemingly innocuous, departures from this precise wording such as “charitable or benevolent purposes” may mean that this requirement is not met.

3.8.3 The following examples would be unacceptable for a CASC

  • provision for the assets to be divided amongst the members
  • no provision at all for the assets on dissolution
  • provision for assets to be given to non-charitable or not for profit organisation, or
  • provision for the assets to pass to what the club deems to be an approved sporting body

3.8.4 HMRC has no objection to a club having a dissolution clause that provides for repayment of any unspent grant to be made to a grant making body, where this was a condition of the original grant.

3.8.5 Once the contractual obligation to repay any unspent grant had been met the residual surplus must be applied for approved sporting or charitable purposes as outlined above.

3.9 Payments to members (Including the awarding of prizes)

3.9.1 A club is allowed to:

  • enter into agreements with members for the supply to the club of goods or services, or
  • employ and pay remuneration to staff who are also members of the club

provided the terms are approved by the governing body of the club without the member concerned being present and are agreed with the member on an arm's length basis.

3.9.2 So, a club would be able to pay members for services such as coaching or grounds maintenance as long as the conditions above were satisfied. We would not normally expect a CASC to pay members to play. However, some small payments to some members for playing may be acceptable as long as the object of paying players is to encourage wider participation in the sport. A club which pays players simply to achieve competitive success will not meet the qualifying criteria.

3.9.3 Example 1. A cricket club pays a member for his services as a groundsman. The rates of pay are reasonable and negotiated at arms length. This would be acceptable.

3.9.4 Example 2. An amateur football club pays two professional players to play in a league. In addition to their playing duties the two players have coaching and development roles with the club's junior squads which are open to all, regardless of ability. Again, this would be acceptable.

3.9.5 Example 3. A rugby club fields three teams that play in league tournaments. The first team players are engaged on full-time professional playing contracts. While they are required to undertake a small number of promotional activities they do not have any coaching or junior development role. This would be unlikely to be accepted as a CASC.

3.9.6 Awarding Of Prizes
Clubs may wish to arrange prize competitions where the nature of both the competition and the prize is such as to promote participation in the sport.

3.9.7 The value of prizes, whether in cash or goods, should be commensurate with amateur participation in the particular sport.

3.9.8 Competition prizes of sufficient value to attract professionals or such frequency that could be equated with payment to players would preclude qualification as a CASC.

3.9.10 Example 1 A Cycling club promotes races in which members and others, particularly local juniors, are encouraged to participate. Modest cash prizes are awarded and funded from entry fees and local sponsorship. This would be acceptable.

3.9.11 Example 2 A Golf club holds regular competitions for members throughout its season. Although individual events may be limited by gender or handicap, all members are able to participate in some of the competitions. Prizes of golf equipment, e.g. bags, shoes, balls or vouchers redeemable at the club shop are awarded. Again, this would be acceptable.

3.9.12 Example 3 A Bowling club organises frequent competitions for club members with cash prizes subsidised by a brewery. Senior players derive significant benefit from these arrangements. A club that subsidised its members in this way would be unlikely to qualify as a CASC.

3.10 Main Purpose

3.10.1 The main purpose of the club must be to:

  • provide facilities for, and
  • encourage participation in one or more eligible sport

3.10.2 The club's governing document must make it clear that this is the club's main object. That does not rule out the club having social members, but we would expect the substantial majority of the club's activities to be directed at furthering the main object. Where a club's social activities are disproportionately large, that might call into question whether the club meets the main purpose requirement. This might be the case where only a minority of the club's members actively participate in the sport concerned.

3.10.3 The club must be engaged in providing facilities and encouraging participation.

3.11 Providing facilities

3.11.1 The club does not have to own the facilities for participating in eligible sports. So, a club that regularly hires facilities at a Local Authority leisure centre to enable members to participate would be providing facilities. Similarly, a club that provides equipment and organisation, without providing premises, might be eligible.

3.11.2 Example 1. A swimming club that regularly hires pools to hold lessons and training sessions would be likely to qualify.

3.11.3 Example 2. A cycling club that organises social and training rides and open competitions without having any premises would be likely to qualify.

3.12 Encouraging participation

3.12.1 The club's emphasis must be on encouraging all members to participate regardless of their ability. So, a club that pursues a team sport might field a number of teams, ranging in ability from recreational and novice players up to a reasonably high competitive standard. This would be acceptable as long as the overall emphasis was on participation. A club that only allowed participation at an elite level with other members being spectators rather than players would not be acceptable.

3.12.2 In order to qualify as a CASC the majority of a clubs membership must participate in an eligible sport. A participating member is not merely restricted to a member who plays, but includes those engaged in activities such as coaching, managing, preparing surfaces, refereeing, supervision of juniors, indeed broadly any non-paid work undertaken on behalf of the club. The club might also have junior members (who are not included as members), but who are participating in the sport.

3.12.3 Certain classes of members, such as family members, who will generally have joined in furtherance of the sporting activities and not primarily to enjoy social benefits, can also be included.

3.13 Eligible sports

3.13.1 Eligible sports are defined by Treasury Order, by reference to the Sports Councils’ list of recognised activities. The list can be accessed at www.sportengland.org/index/get_resources/resource_ul.htm

The list of sports as at July 2002 is at annex 1.

3.13.2 HMRC cannot consider applications from clubs whose sport is not on the Sports Councils' list. Any requests for new activities to be added to the list should be addressed to the Sports Councils, not to HMRC.

3.14 How to register as a CASC

3.14.1 To register as a CASC you need to apply to HMRC Sports Club Unit using the Application form in Appendix 1 at the end of this guidance. You should send the completed form to HMRC Sports Club Unit with the following information:

  • a copy of the CASC's governing document - this might be a constitution, Rules or Memorandum & Articles of Association
  • a copy of the CASC's latest accounts
  • a copy of any prospectus, member's handbook, rule book etc

3.14.2 We will let you know when we have registered the club as a CASC and tell you what date it is registered from.

3.14.3 We might refuse to register some clubs as CASCs, or register them only after they have changed their rules. If you disagree with our decision, either to not register or to register from a later date, there is provision for you to appeal against our decision. We will provide details of how to appeal when we tell you our decision.

3.15 What will be the effective date of registration?

3.15.1 The legislation gives HMRC discretion to make registration effective from a date before the application is received. Normally, we will register a club with effect from the beginning of the accounting period in which it applies, provided it met the qualifying requirements throughout that period.

3.15.2 Where a club has had to change its rules to meet the criteria, we will only register the club with effect from the date the new rules were formally adopted.

3.15.3 No registration will be effective before 1 April 2002.

3.16 Are CASCs charities?

3.16.1 A sports club that is registered as a CASC is not a charity. However, it is open to any sports club to apply to the Charity Commission ("CC") for registration as a charity. While it is possible for a club to be a CASC and a charity the trading activities that a CASC can carry on may be a bar to charitable status.

3.16.2 The CC will consider registering as charities those sports clubs, in England and Wales, that seek to encourage community participation in healthy recreation for the public benefit. The CC guidance on this can be found at www.charitycommission.gov.uk/registeredcharities/sport.asp

3.16.3 Sports clubs in Scotland or Northern Ireland may apply to the HMRC to be accepted as a charity for tax purposes. We would expect the principles of the CC guidance to apply to Scottish and Northern Irish organisations applying to the HMRC for recognition of their charitable status.

3.17 The tax reliefs for registered CASCs

3.17.1 Sports clubs of the kind that are eligible to register as CASCs are treated as companies for tax purposes. Consequently, their profits may be chargeable to Corporation Tax.

3.17.2 Sports clubs that are registered as CASCs will be able to claim the following tax reliefs:

  • exemption from Corporation Tax on profits from trading where the turnover of the trade is less than £30,000 (prior to 1 April 2004 limit was £15,000)
  • exemption from Corporation Tax under Schedule A on income from property where the gross income is less than £20,000 (Prior to 1 April 2004 limit was £10,000)
  • exemption from Corporation Tax on interest received
  • exemption from Corporation Tax on chargeable gains

3.17.3 All of the exemptions depend upon the club having been a registered CASC for the whole of the relevant accounting period and the income or gains being used only for qualifying purposes.

3.17.4 If the club has only been a registered CASC for part of an accounting period the exemption amounts of £30,000 (for trading) and £20,000 (for income from property) are reduced proportionately. Only interest and gains received after the club is registered are exempted.

3.17.5 If the clubs accounting period spans the 1 April 2004 then part of the clubs income will be subject to the old Corporation Tax exemption limits and part to the new. You will need to treat the period before the 1 April 2004 and the period after as two separate accounting periods and apportion trading and property income accordingly.

3.17.6 'For qualifying purposes' means for the purposes of providing facilities for, and promoting participation in, one or more eligible sports. This may extend to some investments of surplus funds where those investments are clearly commercial in nature and made for the financial benefit of the CASC.

3.17.7 Where a CASC spends its income or gains in ways that are not qualifying purposes there are rules that restrict the CASC's exemption from tax. For example, if a CASC spent half of its income in ways that were non-qualifying we would restrict its tax exemptions to half its income. This would not affect income that would not be taxable anyway.

3.17.8 Example 1. CASC 1 runs a trade with turnover of £20,000, has rental income of £15,000 and interest of £500. All of the income is applied for qualifying purposes. The trade and rental income is below the relevant limits. All the income is applied for qualifying purposes and is consequently exempt from tax.

3.17.9 Example 2. CASC 2 runs a trade with turnover £40,000, profit £6,000. Because the turnover exceeds the £30,000 limit the profit is taxable at the appropriate Corporation Tax rate. CASC 2 also has gross rental income of £12,000, net £4,000.

3.17.10 Example 3. CASC 3 lets part of its premises to other organisations and receives rental income of £18,000 per annum. Its accounting period ends on 30 June and it obtains registration as a CASC with effect from 1 December 2004. The property income for the period 1 December 2004 to 30 June 2005 will amount to £10500 (£18,000 x 7/12). The exemption is also reduced proportionally but, as the limit is £11,666 (£20,000 x 7/12), the income of £10500 for the first CASC period of registration will be exempt.

3.17.11 Example 4. CASC 4 is entitled, in a particular accounting period, to exemption on the following sources of income,

  • Bank interest = £6,000
  • Income from property (gross) = £5,000
  • Gift Aid income (gross) = £15,000
  • total = £26,000

The club also has income of £5,000 membership fees.

During the accounting period the club spends £7,000 on a non-qualifying purpose.

The calculation of the reduction of income, which is available for relief is as follows:
£26,000 - (£26,000 x £7,000 / £31,000) = £26,000 - £5870 = £20,130

The HMRC will determine which source of income (£5870) will be brought back into charge to corporation tax. However, the club can, within thirty days of being notified of this, specify which income or gains it wants brought back into charge.

NB: As CASC 4 has no other taxable income, the income of £5870 is charged at the appropriate corporation tax rate.

3.18 Claiming the tax reliefs

3.18.1 Where a CASC receives a CTSA tax return the relief can be claimed in the return. However, most clubs will not receive a CTSA tax return each year. If the club has had tax deducted from its income, or if it has received Gift Aid payments, it will be able to claim a repayment from HMRC Sports Clubs Unit.

3.18.2 If you think that your club is liable to tax, but it has not received a notice to file a tax return you should ask HMRC Sports Clubs Unit to send you a return.

3.19 Reliefs for donors

3.19.1 There is a range of tax reliefs to encourage individuals and companies to support CASCs.

3.19.2 Individuals can make gifts to CASCs using the Gift Aid scheme (see below).

3.19.3 Individuals can include the gross value of Gift Aid donations to CASCs when making a Tax Credit application or, when computing age related personal allowances.

3.19.4 Individuals can obtain relief from Inheritance Tax for gifts to CASCs. Gifts will not form part of the donor's estate for inheritance tax purposes, in the same way as gifts to charity.

3.19.5 Businesses that give goods or equipment that they make, sell or use get relief for their gifts. They do not have to bring any disposal amount into account, but can still obtain relief for the cost, for tax purposes.

3.19.6 Gifts of chargeable assets to CASCs by individuals or companies are treated as giving rise to neither a gain nor a loss for Capital Gains purposes.

3.19.7 There are rules to prevent the exemptions for CASCs and the donor reliefs being used for tax avoidance purposes.

3.20 Gift Aid

3.20.1 Individuals who are UK taxpayers can make gifts to CASCs using Gift Aid in the same way as they can make gifts to charities. Relief is available for gifts made to a registered CASC after 6 April 2002. Gift Aid is only available for gifts to CASCs and not for other payments such as membership subscriptions.

3.20.2 A CASC can reclaim basic rate tax on donations made by individuals, whether large or small, regular or one-off - provided the conditions for the Gift Aid scheme are satisfied. In particular, the CASC will have to be able to show an audit trail from the donation to a donor who has given a Gift Aid declaration that covers that donation. A model Gift Aid declaration for use by a CASC is shown at Appendix 2.

3.20.3 The rules of the Gift Aid scheme for individuals, as they apply to charities, also apply to registered CASC's (but remember, a CASC's membership subscriptions are not eligible as Gift Aid payments). You can find more information by visiting the guidance notes on the Gift Aid scheme. (But remember the guidance relating to membership subscriptions applies to charities only - not to CASCs)

Chapter 3 Gift Aid

3.20.4 Gifts made using Gift Aid are treated as having been paid after deduction of Basic Rate income tax. As long as the CASC applies the income for qualifying purposes it can claim repayment of this tax from HMRC Charities (at present 28p for each £1 donated (while the Basic Rate of income tax remains at 22%))

3.20.5 If the donor pays tax at the Higher Rate they can claim additional relief in their SA tax return. All they need to do is enter the amount donated to the CASC in the Gift Aid box on their SA return.

3.20.6 Companies cannot make gifts to CASCs using Gift Aid, but can normally claim a deduction in computing their profits for either formal sponsorship of a sports club or for payments made to enhance their standing in the local community.

3.21 How to register for Gift Aid repayments

3.21.1 When you apply to register as a CASC we will send you the information and forms that you need to register for repayments under Gift Aid. If you have had tax deducted from interest, you can claim repayment at the same time as claiming under Gift Aid.

3.21.2 In particular, you will need to nominate a named individual who is authorised to claim repayments on behalf of the CASC.

3.22 Non-domestic rates relief for CASCs

3.22.1 For CASCs in England and Wales Section 64 of the Local Government Act 2003 provides the same relief that would be available to a charity (80% mandatory relief) where the CASC property is wholly or mainly used for the purposes of that club and of other such registered clubs. With effect from 1st January 2006, CASCs in Scotland, became entitled to the same mandatory 80% rate relief.

3.22.2 HMRC does not administer this relief and therefore requests for advice on non-domestic rates you will need to contact your Local Authority Finance Department.

3.23 De-registration

3.23.1 There is no provision in the legislation for a club to de-register. Once a CASC always a CASC. Before applying to be a CASC, members really need to be agreed that what they really want is to maintain the club for the continuing use of the community. If members have one eye on selling off the ground for building a supermarket and sharing the profits, then CASC status is not for them. If a CASC ceases to operate, its assets would have to be passed on in accordance with the legislation to another CASC, a registered charity or the governing body of an eligible sport for use in related community sport.

3.23.2 It should also be borne in mind that where a club holds property and, without disposing of it-

(a) ceases to be a registered club, or
(b) ceases to hold property for qualifying purposes

it will be treated as having disposed of and immediately reacquired, the property at the time of cessation for a consideration equal to its market value at that time. As any gain will not be treated as accruing to a registered club, a CASC ceasing to be registered could have a capital gains tax liability.

3.24 Contact us

3.24.1 If you require further assistance please contact us.

By Email

By telephone

By fax - 0151 472 6268

By Post

HMRC Charities
Sports Club Unit
St John's House
Merton Road
Bootle
Merseyside L69 9BB

Annex 1

List of activities recognised by the Sports Councils at January 2007

Aikido
American Football
Angling
Archery
Arm Wrestling
Artistic Skating (roller)
Association Football
Athletics
Australian Rules Football
Badminton
Ballooning
Ballroom Dancing
Baseball/Softball
Basketball
Baton Twirling
Biathlon
Bicycle Polo
Billiards and Snooker
Bobsleigh
Boccia
Bowls
Boxing
Camogie
Canoeing
Caving
Chinese Martial Arts
Clay Pigeon Shooting
Cricket
Croquet
Curling
Cycling
Dance Sport
Darts
Disability Sport
Diving
Dragon Boat Racing
Duathlon
Equestrian
Exercise and Fitness
Fencing
Fives
Folk Dancing
Flying
Futsal
Gaelic Football
Gliding
Golf
Gymnastics

Handball
Hang/Para Gliding
Harness Racing
Health and Beauty Exercise
Highland Games
Hockey
Horse Racing
Horse Riding
Hovering
Hurling
Ice Hockey
Ice Skating
Jet Skiing
Ju Jitsu
Judo
Karate
Keep Fit
Kendo
Knee Boarding
Korfball
Lacrosse
Lawn Tennis
Life Saving
Luge
Model Aircraft Flying
Modern Pentathlon
Motor Cycling
Motor Sports
Mountain Biking
Mountaineering
Movement, Dance, Exercise & Fitness
Netball
Octopush
Orienteering
Parachuting
Petanque
Polo
Polocross
Pool
Power Boating
Powerlifting
Puck Hockey (roller)
Quoits

Racketball
Rackets
Rafting (white/wild water)
Raquetball
Rambling
Real Tennis
Roller Hockey
Roller Skating
Rounders
Rowing
Rugby League
Rugby Union
Sailing
Sand/Land Yachting
Shooting
Show jumping
Skateboarding
Skiing
Skipping
Snooker
Snowboarding
Softball
Sombo
Speedway
Speed Skating (roller)
Squash
Skater/Street Hockey
Sub-Aqua
Surf Life Saving
Surfing
Swimming & Diving
Table Tennis
Taekwondo
Tang Soo Do
Tenpin Bowling
Trampolining
Triathlon
Tug of War
Unihoc
Volleyball
Wakeboarding
Water Polo
Water Skiing
Weightlifting
Wind Surfing
Wrestling
Yoga

Annex 2

Multi Sports Clubs

1. Some sports clubs provide facilities for and promote participation in more than one sport. These 'multi-sports' clubs can be structured in a number of different ways. They are usually unincorporated associations or companies limited by guarantee, with a management committee or board of directors (referred to below as 'MC'). Clubs are free to organise as they see fit but not all of the different structures will qualify for CASC purposes.

2. Examples of Multi-sports clubs that may qualify as CASCs:

2.1 Integrated single entity. In this model there is a single club run by a single MC that admits and removes members, organises the sporting activity and manages the property and financial affairs of the club. There is one bank account and one set of accounts. Each individual wishing to join becomes a member and pays a subscription to the club. This type of club can be accepted by HMRC as a CASC, provided that it meets the statutory criteria, including having an appropriate constitution.

2.2 Single entity with integrated sub-sections. Here the club has a single MC that is responsible for running the club. The MC delegates responsibility to different sub-committees to organise the various different sports and may also choose to delegate responsibility for admitting members to their sections (e.g. the football committee admits members who wish to play football). The MC may set guidelines for subscriptions but the exact level may be left for individual sub-committees. Members wishing to play different sports may need to apply to the appropriate sub committee and pay the appropriate subscription or the MC may deal with subscriptions. Each section may have regulations or byelaws setting out their delegated responsibilities.

2.2.1 In some cases these sub-committees may operate separate bank accounts (which are all club bank accounts). Indeed, separate sections may be required by governing bodies or grant makers to compile separate accounts. However, the club must consolidate these into one set of club accounts, which will incorporate the income and expenditure of all the integrated sub-sections.

2.2.2 Final responsibility for the whole club rests with the central MC who can, for example, limit the amount of expenditure and debt each sub-committee can incur. In addition, on winding up, the assets from one section of the club are available to cover debts in other sections. This type of club can be accepted by HMRC as a CASC, provided that it meets the statutory criteria.

2.3 Lead club with independent affiliated clubs. Here one club (for example a rugby club) may own and manage the facilities, but allow affiliated clubs to use its facilities.

2.3.1 In such circumstances there is no single club that can be registered as a CASC. Each individual club must decide whether to register as CASCs in its own right. The lead club will benefit from mandatory non-domestic rates relief if registered.

2.4 'Mother' club with affiliated member clubs. Here there is a 'mother' club that owns or rents the property. The MC of the 'mother club' is responsible for the provision of facilities and promoting participation in the sports conducted by the club. It will be the rateable occupier. There are a number of affiliated member clubs who use the facilities. Each affiliated member club can each be accepted by HMRC as a CASC, provided that it meets the statutory criteria. On the same basis, the ‘mother’ club can also be accepted as a CASC, although such clubs may find they do not meet the criteria.

2.4.1 Each individual member of an affiliated club must be entitled to become a member of the mother club. They may for example be automatically given membership of the mother club when admitted as a member of an affiliated club. Or the mother club may admit them as members and then they apply or are allocated to the different affiliated clubs, depending on what sport they wish to play. There may be a subscription to join the mother club or this may be free with subscriptions paid to the affiliated clubs for membership of these.

2.4.2 The members of the mother club appoint the MC of the mother club (which may specify that each affiliated club must be represented etc).

2.4.3 Each club within this structure will have to decide whether it wishes to apply for CASC status. Applications will be judged independently upon the criteria of the CASC scheme.

2.4.4 It is not essential for all (or indeed any) affiliated club to apply or qualify as a CASC for the mother club to apply in its own right for CASC status. Regardless of the activities of any affiliated clubs, to be accepted as a CASC, the mother club must itself meet the statutory criteria. Crucially this means that the 'mother' club must itself actively promote participation in eligible sports and cannot merely be a passive provider of facilities. (See paragraph 4)

3. Multi-sports clubs that cannot qualify as CASCs:

3.1 'Mother' club with affiliated member clubs. Where the mother club has no individual membership, but has as its members the affiliated clubs (i.e. it is a club of clubs), then we will not accept that the 'mother' club can register as a CASC, though the affiliated clubs will be able to apply for CASC status.

3.1.1 This structure does not comply with the CASC requirements as membership is only open to organisations (the affiliated clubs) and not to individuals. It is therefore not open to the whole community.

4. Promoting participation within a mother club/affiliate structure

4.1.1 The CASC legislation clearly states that a club must provide facilities and promote participation. Providing facilities does not of itself meet the requirements to promote participation. The club must actively promote participation. The CASC scheme is not appropriate for organisations that operate solely as facility providers.

4.1.2 Activities that a 'mother' club might engage in to promote participation in sports might include:

  • actively engaging with the local community and the sports governing bodies to widen participation;
  • publicising its facilities and the sports that it caters for and taking positive action to attract new participants to the club;
  • organising festivals, tournaments and coaching courses.

It will be a question of fact to be decided in individual cases whether a club's activities are sufficient to amount to promoting participation.

4.1.3 In the mother club/affiliate club model the mother club and each of the affiliate clubs choosing to apply for CASC status must individually meet the criteria of the CASC scheme. The mother club cannot itself claim to have fulfilled certain criteria such as promoting participation in an eligible sport merely because of the actions of an affiliate club. Neither can the affiliate club claim to have met certain criteria based upon the actions of the mother club.

5. Affiliated clubs

5.1 Where a club has affiliated clubs (examples 2.3 and 2.4) it is not necessary for all those affiliated clubs to register as CASCs. This is a decision for the clubs.

5.1.1 However, where members of the affiliate club are automatically entitled to membership of the mother club (example 2.4) the mother club will need to be certain that it can prove that its own main purpose is providing facilities for and promoting participation in eligible sports and that its own membership is open to the whole community. This will be easier to demonstrate where the affiliate clubs are CASCs - but it is not a prerequisite that the affiliate clubs qualify as CASCs.

5.1.2 Affiliate clubs that are not registered as CASCs, for example because they engage in activities that are not eligible may affect the ability of the mother club to claim CASC status as their members could be treated as being non-participating members in the mother club. Broadly at least 50% of members must be participating in eligible sports for the club to retain its CASC status. This will be determined on the facts of each case.

5.1.3 Affiliated clubs need not be tied to the mother club and may break the relationship with the mother club. However, this may in certain circumstances affect the status of the mother club as a CASC, for example if the majority of the remaining members of the mother club are non-participating.

Annex 3

Changes to Guidance since 1 November 2004

  • 19/11/04 - Guidance on prize giving added at paragraph 3.9
  • 19/11/04 - Guidance on multi-sports clubs added at annex 2
  • 19/11/04 - Examples at 3.17 amended to reflect new Corporation Tax exemption thresholds introduced with effect from 1 April 2004