HISTORIC PRESS RELEASE : Community Sport is tax winner [July 2002]

The press release issued by HM Treasury on 25 July 2002.

Community sport will benefit as tens of thousands of clubs gain from Government changes to help community amateur sports clubs (CASCs) ease their tax bills.

From today, many CASCs can be better off if they register with the Inland Revenue to claim tax reliefs, which mean:

• fundraising income up to £15,000 exempt from tax
• income from interest exempt from tax
• rental income up to £10,000 exempt from tax
• disposals assets exempt from capital gains tax
• gift aid on individual donations
• inheritance tax relief on gifts
• gifts of assets on no-gain, no-loss basis for capital gains
•  business relief on gifts of trading stock

Welcoming the new tax package for sport in the community, Treasury Minister John Healey said:

“We want to encourage as many people as possible – particularly young people – to take up sport. These measures will make it easier for local sports clubs to offer them the chance.

Sports clubs play an invaluable role in their communities.  Local people give their time willingly and voluntarily to make these clubs work.  Despite the improved Charity Commission guidance issued in April, not all-amateur sports clubs can apply for the tax benefits of charitable status. The new tax package rectifies this, offering clubs many of the benefits of charitable status.

I hope that as many clubs as possible will now register for the tax breaks – it is simple to do and could bring huge benefits.”

Sports Minister Richard Caborn said:

“This is great news for amateur sport. Building on the work done by DCMS, the Charity Commission and Sport England on improved guidance for sport, this package should ensure that no amateur club will miss out on a range of real financial benefits.”

Trevor Brooking CBE, Chairman of Sport England, welcomed the change:

“Combined with the Charity Commission’s extension of charitable status, which will also benefit many of these clubs, this tax relief change will benefit grass roots sport.  It will help clubs off the pitch so they can perform better on it.”

The Charity Commission announced in November 2001 that it would recognise as charitable “the promotion of community participation in healthy recreation by the provision of facilities for the playing of particular sports”. DCMS subsequently worked with the Commission on the improved guidance for sport which was published in April 2002. However, Treasury and DCMS consultation with CASCs and their representative bodies revealed that CASCs who could not, or did not want to, apply for charitable status needed an alternative system of support.

The tax relief package was designed to meet these concerns and ensure that community sport in the UK is put on the best possible basis to encourage and develop local talent.

For a great many clubs, charitable status remains appropriate and offers wider benefits, including:

• mandatory 80 per cent business rate relief
• tax exemption for trading income
• Payroll Giving, and tax reliefs for gifts of shares or land and buildings by individuals and companies

Charitable status can also open up new sources of funding (e.g. grants available from other charities such as community foundations).