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bigduckontax
bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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I am working with a Football club who have been formed for

Customer Question

I am working with a Football club who have been formed for 10 years + but have recently had their own club house built which includes a bar & they also run a snack bar for when they have training sessions on during matches etc. They have club events to raise money for the club and They also hire their room out for functions to people for weddings and parties which are not sport related. Anyone who hires the room has to be a member as part of their licence agreement. so they have social and participant members. They are now looking at what type of business they should form that would give them the best tax relief. All profits go back into the club house or grounds. I have been looking at CASC and also charities but not sure which would be best or can you recommend the best way. They don't employ anyone they have volunteers who run the bar and any events.
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I am Keith, one of the experts on Just Answer, and happy to help you with your question.
Whilst they are trading between members they are outside the scope of UK taxation. Once they start selling to non members the club becomes liable to tax, However, if the club can register under CASC providing it falls with the Scheme's parameters it will escape taxation. You can find basic details at the following Gov UK web site:
https://www.gov.uk/register-a-community-amateur-sports-club/register
In my opinion CASC is a far simpler route to adopt as opposed to a charity. It is specifically designed for sports clubs so why not use it?
I do hope I have shed some light on the position.
Customer: replied 2 years ago.
Can you advise the benefits of being a casc as opposed to a charity so j can present this to them
Expert:  bigduckontax replied 2 years ago.
The accounting requirements are more onerous for charities and if their aggregate income exceeds GBP 1m pa their accounts must be audited. Furthermore, charities are subject to scrutiny by the Charities Commission (CC). Even big charities have not escaped their notice. Dulwich College the well known public school in London has had several run ins with the Commissioners and The Salvation Army, no less, were forced to close down certain facilities by the CC.
providing a sports cbub is:
'To register as a CASC you must provide facilities for eligible sports and encourage people to take part. Under the new rules from 1 April 2015, at least 50% of members must take part.
You must also:
be set up with a formal constitution, known as a governing document
be open to the whole community and have affordable membership fees
be organised on an amateur basis
be set up and provide facilities in the UK, the EU, Iceland, Liechtenstein or Norway (but in one country only)
be managed by ‘fit and proper persons’'
So once you are set up the system is much simpler to operate.
Customer: replied 2 years ago.

Thank you I found all of this info already it hasn't really answered my question as all of this info is readily available on the internet.

I wanted more of a comparison between the two forms of organisation e.g.:

Charity you can earn this much but you have to pay tax on X

CASC you can earn this much but you have to pay tax on Y

Rates or exemptions that are applicable given the activities listed:

Player Memberships

Social Memberships

Room Hire - non related events

Bar sales for non related events

Bar sales for fund raising events

Snack bar sales for football events

and also the benefits of being a CASC over a charity

That's the information I am looking for. Can you help?

Expert:  bigduckontax replied 2 years ago.
A CASC merely a form of simple charity designed to encourage sport, but lacking the more onerous disciplines of a charity, particular a larger one. If all the surpluses are plowed back into the organisation there are no tax liabilities. The same is, of course, true of a charity. If this occurs neither organisation pays any tax at all and even the income tax paid on taxed income by contributors can be reclaimed through the 'gift aid' process.
All the activities you mention are permitted by the tax system; the only difficulty is if they are permitted by the organisation's constitution. For CASC it is relatively easy, for charities rather more complex which is how The Salvation Army fell foul of the CC over their hotel in Judd Street, London and had to discontinue the activity.
With respect I feel that you are over complicating the issue. A caSC is easier to operate and both are tax free providing the activities are permitted by the organisation's constitution.
Customer: replied 2 years ago.
The committee want a comparison between the two something I still have not had from you can you answer this or not?
Expert:  bigduckontax replied 2 years ago.
I have explained the differences between the two operating options. Both require similar books of account to be maintained. A charity, however, must register and be subject to scrutiny by the Charities Commission. On the other hand CASC is specifically designed as a Government initiative to encourage sport, particularly amongst young people, and offers more light handed regulatory regime.
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 2 years ago.
Thank you for your support.

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