Running a community amateur sports club (CASC) means you must inform HM Revenue and Customs (HMRC) about certain situations, including:
- Any time your CASC needs to pay Corporation Tax.
- Changes that occur within your community organisation.
The new tax rules for CASCs mean that certain types of income is not liable for taxation, providing you:
- Register as a community amateur sports club with HMRC.
- Use it to promote the participation in, and provide facilities for, eligible and recognised sports.
CASCs may need to pay tax if the club uses money for other (non-qualifying) purposes or its trading or property rental income goes over the tax relief threshold.
Note: Significant changes to the rules for community amateur sports clubs took place on the 1st of April 2015.
A community amateur sports club would need to register for VAT if its taxable turnover goes over the current VAT registration threshold for the United Kingdom.
You may still decide to register even if you stay below the threshold. One of the benefits for doing so would be to reclaim VAT on your supplies.
Taxable turnover refers to the total value of everything sold that is not exempt from Value Added Tax. So in this case, income raised from fundraising events and sporting activities would be exempt.
Note: The HMRC charity helpline is an online resource where you can get expert help and advice about charities and community amateur sports clubs.
Paying Corporation Tax
Unless the income or capital gains qualifies for CASC tax relief, community amateur sports clubs would need to pay Corporation Tax on it. In this case, you would need to:
- File a Company Tax Return for CASC.
- Use supplementary pages CT600E to claim exemption from tax on all (or any part) of its income and gains.
With tax to pay, there is no need to complete a tax return unless HM Revenue and Customs request it from you. But, the accounts and tax returns for private limited companies still need sending to Companies House.
Note: Failing to complete a tax return when you should, or filing a late tax return, can result in a fine.
Reporting Changes to a CASC
The most common types of changes that community amateur sports clubs must report include alterations to:
- Bank or building society account details.
- Contact information for the organisation.
- Management team (authorised officials or responsible persons).
- Nominee details (including bank or building society accounts).
A change in the CASC constitution must still meet the eligibility rules for community amateur sports clubs. HM Revenue and Customs can cancel the registration if it does not meet the qualification criteria.
Use the change of details form (ChV1) to report changes about a community amateur sports club to HMRC. You should allow at least thirty (30) days for HM Revenue and Customs to register the changes.
CASC Closure or Deregistration
You can choose to close your CASC, but you cannot remove it from the register (i.e. deregister it). This is because only HM Revenue and Customs (HMRC) can deregister a CASC.
If the members of your club take a vote and agree to close down the CASC, you would need to:
- Adhere to the rules in the governing document.
- Notify HM Revenue and Customs (HMRC) about the change.
Note: After closing down a community amateur sports club, HMRC will inform you whether you need to complete a Company Tax Return.
Disposing of the Assets
Rules exist on what happens to assets when closing a CASC (e.g. money, land, property). The remaining assets can only be used for:
- A charity
- Another registered community amateur sports club
- Related community sport (decided by the governing body of the sport)
Note: Using assets for a different purpose means having to pay Corporation Tax when you sell business assets.
If HMRC Removes a Club from the Register
If the club no longer qualifies, HMRC can cancel CASC registration by writing to the secretary of the CASC. The action can also be backdated. If HMRC deregisters a CASC:
- It may need to pay Corporation Tax on any assets taken out of the club.
- It would no longer qualify for tax exemptions (from the deregistration date).
ALSO IN THIS SECTION
Registering as a CASC
The guide explains how to register as a community amateur sports club (CASC). Check if your organisation qualifies and what documents you need to submit form CASC (A1) for registration.
Tax Relief for CASCs
There are several types of tax reliefs for community amateur sports clubs (CASCs) available providing the money received meets the criteria of ‘qualifying purposes’.