cascs and charities – what do ngbs need to know? 25 march 2013 thea longley and augustus...
TRANSCRIPT
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CASCs and Charities – What do NGBs need to know?25 March 2013
Thea Longley and Augustus Della-Porta
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What I will cover:
• Background
For clubs:
• Options – CASC and charity
• Criteria for registration
• Benefits of registration
• Main differences
For NGB’s:
• Options for charitable status
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Opportunities for NGBs
• To promote sustainability of clubs.
• Facilitate registration by agreeing model constitution with HMRC and the Charity Commission.
• Fund clubs via associated charities.
• Register NGB as a charity (if amateur sport only)
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Background
• Re: Nottage.
• Encouraging “mere” sport was not charitable.
• Sport was only charitable if it furthered another charitable objective, eg. health, relief of disability or education.
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Background (cont/.)
• CASC introduced to offer sports clubs similar tax reliefs to charities with lighter touch regulation. Only membership clubs can apply.
• Charitable status is now available for sports clubs. However, charitable status is also an option for delivering other sporting activity, eg. Football Foundation, Rugby Football Foundation, Kick It Out,.
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Options for Clubs
• Three options for sports clubs:
– remain as you are;
– register as a CASC with HMRC; or
– register as a charity with the Charity Commission.
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Criteria for Registration - CASCs
• The club must:
– as its main purpose provide facilities and promote participation in one or more eligible sport;
– be open to all;
– be amateur;
– be established within the EU; and
– have managers that meet HMRC Fit and Proper Person Test.
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Criteria for Registration – CASCs (cont/.)
• “Eligible Sport” means those listed by HMRC.
• “Open to the whole community”, ie:
– membership is open to all without discrimination; and
– any fees are set at a level that do not pose a significant obstacle to membership or use of the club’s facilities.
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Criteria for Registration – CASCs (cont/.)
• “Amateur” means:
– players not paid but expenses can be reimbursed;
– player-coaches may be paid;
– non-profit making;
– any net assets on dissolution are to be applied for approved sporting or charitable purposes; and
– it provides the members and guests only with the ordinary benefits of an amateur sports club.
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Criteria for Registration - Charities
• The club must:
– either promote community participation in healthy recreation by providing facilities for playing sports or advance amateur sport;
– have membership and facilities that are open to all without discrimination;
– be amateur; and
– be for public benefit.
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Criteria for Registration – Charities (cont/.)
• “Healthy recreation”:
– the Charity Commission’s Guidance RR11 currently excludes certain sports from the list, such as angling, ballooning, crossbow, flying and gliding (these are not excluded from the CASC list).
Note: The wording of objects in the constitution is important. The Charity Commission currently won’t always accept “advancing amateur sport”
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Criteria for Registration – Charities (cont/.)
• “Open membership”:
– similar to that of CASCs. However, a charitable club cannot have social members. It can only have non-playing members that help run the club;
– the bar must be run through a separate trading subsidiary; and
– it must provide sufficient public benefit which includes a requirement that “those in poverty must not be excluded from the opportunity to benefit”.
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Benefits of Registration - CASCs
• CASCs have exemption from Corporation Tax:
– on profits from trading where the turnover of the trade is less than £30,000;
– on income from property where the gross income is less than £20,000;
– on interest received; and
– on chargeable gains.
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Benefits of Registration – CASCs (cont/.)
• For donors:
– individuals can make gifts to CASCs using Gift Aid;
– relief from IHT on gifts to CASCs;
– businesses can give goods or equipment they make, sell or use and get relief for their gifts; and
– gifts of charitable assets to CASCs by individuals or companies are Capital Gains Tax free.
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Benefits of Registration – CASCs (cont/.)
• Rates relief:
– 80% mandatory and 20% discretionary rates relief on premises wholly or mainly occupied by the club.
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Benefits of Registration - Charities
• More extensive tax reliefs are available than for CASCs, these are:– exemption from Corporation Tax on all profits derived
from fulfilling its charitable purposes;
– exemption from Corporation Tax on profits from non-charitable trading on the lower of 25% of turnover or £50,000;
– exemption from Corporation Tax on interest received;
– exemption from Corporation Tax on Capital Gains; and
– exemption from Stamp Duty Land Tax on purchases of property.
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Benefits of Registration – Charities (cont/.)
• For donors:
– gifts to charities attract the same reliefs as those for CASCs but, in addition:
• companies can make gifts to charities under Gift Aid;
• payroll giving;
• Income Tax relief on gifts of shares; and
• some VAT reliefs may be available, such as zero-rating the construction costs of new buildings.
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Main differences between Charities and CASCs
• Regulation:
– CASCs have light touch regulation from HMRC; and
– charities are more highly regulated by the Charity Commission.
• Social members:
– CASCs can have up to 50% social members; and
– charities can only have non-playing members that assist with the running of the club.
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Main differences between Charities and CASCs (cont.)
• More tax reliefs for charities.
• More types of organisations can register as a charity, eg. leisure centres and non-membership sports organisations.
• Unlike a CASC a charity must run the bar through a separate trading company subsidiary.
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Changes for the CASC regime
• Treasury/HMRC have announced a review of CASC status
• New legislation in the Autumn
• Consultation is coming- please get involved
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Charities for NGBs
• Could the NGB register as a charity?
• What about an associated charity?
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What do charities do?
• Education
• Promoting community participation in healthy recreation
• Promoting other charitable purposes [in association with sport]
• Promoting recreation
• Promoting amateur sport (Charities Act 2011)
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Advantages of a charity
• Tax relief on donations to the charity
• Attractive to funders
• Expertise
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Disadvantages of a charity
• Charity regulation – Charity Commission
• Administration
• Restrictions on activities
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Relationship with Governing Body
• Independence
• Corporate relationship
• Funding relationship
• Cross charging
• VAT groups
• Tainted Donation Regulation
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Charities Act a (slow) New Dawn?
• Sport
• Amateur
• Charity Commission Guidance in the pipeline
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Thea Longley
Bates Wells & Braithwaite London LLP2-6 Cannon StreetLondon EC4M 6YHTel: 020 7551 7777Fax: 020 7551 7600
Email: [email protected]
Augustus Della-Porta
Bates Wells & Braithwaite London LLP2-6 Cannon StreetLondon EC4M 6YHTel: 020 7551 7777Fax: 020 7551 7600
Email: [email protected]
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Workshop locations