CASC Qualifying Purposes: No Tax Liability
Using money received for ‘qualifying purposes’ means no tax is due on:
- Bank interest
- Capital gains (profit realised from disposing of, or selling, an asset)
- Gift Aid donations (can include donations made by a trading company owned by the CASC so you can claim back the tax)
- Income from renting out property (up to £30,000 a year)
- Trading profits on turnover (if it below £50,000 a year)
Note: Significant changes to the rules for community amateur sports clubs took place on the 1st of April 2015.
In most cases, you can claim relief on money that the CASC uses to promote participation in, and provide facilities for, certain types of eligible sports (called ‘qualifying purposes’). But, you would need to register as a community amateur sports club (CASC) to benefit.
Some of the money may also come from community amateur sports club members who have full voting rights. In this case, you would not pay tax on certain other activities, such as:
- Income realised from membership fees.
- Profits from selling food and drink that relates to the sporting activities of the club (e.g. a members bar).
Note: The rules on tax relief for community amateur sports clubs (CASCs) do not allow you to claim back Gift Aid on the membership fees.
Money that CASCs Must Pay Tax On
There are tax liabilities for money received by CASCs if the funds are not used for ‘qualifying purposes’. Besides that, you would also need to pay:
- Business rates (you can apply for charitable rate relief of up to 80%).
- Tax on income from renting out property (if it is more than £30,000 a year).
- Tax on trading profits if the turnover is more than £50,000 a year (work out taxable income for a CASC).
- VAT (HMRC produce guidelines for charities or not-for-profit organisations to check if a fundraising event qualifies for VAT exemption).
Note: The trading or rental income may be more than the relief limits. If so, you would need to pay tax on the full amount after deducting any allowable expenses.
All community amateur sports clubs (CASCs) would need to complete a tax return if they need to pay Corporation Tax.
Note: HM Revenue and Customs (HMRC) can ask you to complete a tax return even if you have no tax to pay. In this case, you must complete one.
You can submit a claim by registering and enrolling for a Charities Online account. The service allows you to claim back tax after it has been deducted (e.g. on bank interest or through Gift Aid donations).
Note: You need to keep records of all transactions that you claim tax relief on (includes Gift Aid declarations). Keep proper records for at least six (6) years after the end of the accounting period that they relate to.