Small sports clubs across the UK could soon flourish after the government announced they were to ease tax regulations in grassroots sport.
Over 40,000 clubs could benefit from the news, in a move that will attempt to encourage participation in sport at all levels, especially with regard to youth development. The move was made to further the creation of a sporting legacy in the UK following the London 2012 Olympics.
The changes have been made to the Community Amateur Sports Club (CASC) scheme following discussions over the last few months. The amendments to the system will now allow sports clubs to keep up to £80,000 each in revenue before making corporation tax payments.
Clubs will be able to keep the revenue they generate from such sources as bar receipts, café fees and the use and hire of club facilities up to that amount, before paying tax. It will allow larger sums from their profits to be donated back into the club to improve facilities, or for use in other areas. The tax respite now means clubs will be able to generate up to £50,000 per annum in their trading, an increase from the previous figure of £30,000, and £30,000 from the rental income, which has been increased from £20,000.
The new scheme is being run with support from the Football Association (FA) and the Rugby Football Union (RFU), among other UK sports groups that CASC are currently in conjunction with.
Clubs will now also be able to support talented prospects after scope to pay for player fees and expenses were increased. The move will allow players to be supported through a wider range of funds for the first time, with more allowance for travel and subsistence in particular.
Donations to the sports clubs from businesses will also be tax free, as corporations and local businesses will be able to contribute funds to the clubs, now being able to offset their donations against their corporation tax bill. This is a move that is hoped will encourage larger donations to the clubs in the future.
To qualify for the tax reliefs, a new cap on membership costs must be adhered to. Clubs can charge up to £31 per week in membership fees, and special discounts will be offered by clubs that charge more than £10 per week to make joining such clubs more affordable for the public in order to encourage participation and skill development.
Around 6,000 clubs have benefited from the CASC scheme so far, saving over £100m in business rates exemption, and in excess of £12m in Gift Aid relief. It is a number that is expected and hoped to increase with the new announcement made last week.
The Economic Secretary to the Treasury, Nicky Morgan made the announcement, and said: “These new rules will help community amateur sports to continue to offer a local, affordable place to take part and I hope that even more people are encouraged to become involved in sport locally.”
RFU Development Director, Steve Grainger, also added: “The scheme is vital to help those clubs to invest in their facilities and people, whilst keeping memberships affordable, so that rugby can truly be a game for all. We welcome all the changes proposed, and look forward to working on the detail to ensure the best possible outcome for clubs at this exciting time as we get closer to the 2015 Rugby World Cup.”
The changes to regulations are sure to see an increase in sport participation, enabling more people to become future international stars.
What other strategies can be put in place to help participation in sport in the UK?