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The voice of Scotland’s vibrant voluntary sector

Published by Scottish Council for Voluntary Organisations

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Charitable status could put your sports club in a different league

This opinion piece is over 8 years old
 

Alastair Keatinge explains how becoming a charity can bring tax reliefs or new sources of funding to sports clubs

Scotland is full of local rugby, tennis, golf, and other sports clubs, but many don't realise that they could be better off if they became a charity.

Local sports clubs, from cricket to curling, can qualify for a variety of tax reliefs by registering as a Community Amateur Sports Club (CASC) or as a charity. The tax advantages can be especially valuable if they have ambitions to develop their clubhouse or other facilities.

Many sports clubs gain tax benefits by registering as a CASC with HM Revenue & Customs (HMRC). They can then claim tax relief on income, gains and profits from some activities, Gift Aid repayment from donations, and business rates relief.

There are some conditions attached to CASC registration. A club must promote participation and facilities for eligible sports – this must be the main purpose of the club, regardless of ability. It must also have a formal constitution (which should be up-to-date), be open to the whole community, and be organised on an amateur basis.

Alastair Keatinge

Some straightforward legal advice on registration, compliance, governance or constitution could yield excellent results both on and off the pitch

Alastair Keatinge

Many rugby, cricket and other sports clubs in Scotland gain additional benefits from registering as a charity, rather than a CASC. The tax benefits for charities are more extensive, however, there is more regulation imposed.

To qualify as a charity, a sports club must promote public participation. This is one of the charitable purposes set out in the Scottish Charities legislation and is a different test from that applied in England.

The additional benefits from being a charity however include special VAT treatment in some circumstances and gifts of quoted shares and land can be made by both individuals and companies with the benefit of income and corporation tax relief respectively.

The ability to raise funds from public grant-making trusts and local government may also be easier than for non-charitable bodies.

One major potential advantage of charitable status is in relation to VAT on the construction of buildings. If, for example, a club wishes to develop its clubhouse, it would be worthwhile seeking professional advice on whether it could gain advantageous VAT treatment from being a charity.

For those who play sport locally or are invovled in running a sports club, it’s well worth looking into whether the club is enjoying the benefits of being a CASC or a charity. Some straightforward legal advice on registration, compliance, governance or constitution could yield excellent results both on and off the pitch.

Alastair Keatinge is a partner and head of Lindsays Charity Group