Dear Colleagues

Rate Relief for Community Amateur Sports Clubs

This letter explains the background to the voluntary agreement that the Scottish Executive has secured with local authorities - subject to some local discretion on gun clubs (see note below) - to grant at least 80 per cent discretionary rate relief to sports clubs registered as Community Amateur Sports Clubs (CASCs).  It also explains how a sports club can apply to register as a CASC with the Inland Revenue and subsequently how to use this CASC registration to obtain at least 80 per cent rate relief.  I should be grateful if this letter could be disseminated to all of your member sports clubs and councils.

Background

The Minister for Finance and Public Services, Andy Kerr announced in January this year that the Scottish Executive intends to introduce 80 per cent mandatory rate relief for sports clubs which are registered as a CASC with the Inland Revenue.  This will require primary legislation. 

The Minister also indicated that until mandatory rate relief can be introduced, the Scottish Executive was working to secure a voluntary agreement with all local councils to grant from 1 April 2004 - at least 80 per cent discretionary rate relief to registered CASCs.

Voluntary Arrangement

The Minister announced on 13 April 2004 that the Scottish Executive has secured a voluntary agreement with local authorities - subject to some local variations in relation to gun clubs (see Note below) - to grant at least 80 per cent discretionary rate relief to registered CASCs.  This agreement will be effective from 1 April 2004.  The cost of granting this relief will be centrally funded.  The voluntary agreement will remain in place until the Scottish Executive can secure legislation to introduce mandatory rate relief for CASCs. The following link to the Scottish Executive website takes you directly to the announcement.

 http://www.scotland.gov.uk/pages/news/2004/04/SEFD375a.aspx

Benefits of registering as a Community Amateur Sports Club

Apart from the agreement on rates relief there are a number of other benefits to registering your club with the Inland Revenue as a CASC. First, there are the benefits for the clubs themselves.

·         Exemption from tax on trading profits where the turnover is less than £15,000 (To be increased to £30,000 in the Finance Bill 2004)

·         Exemption from tax on income from property where the gross income is less than £10,000 (To be doubled to £20,000 in Finance Bill 2004)

·         No tax to pay on bank or building society interest received

·         Exemption from tax on chargeable gains

Individuals can increase the value of their donations by using gift aid.  Clubs can reclaim basic rate tax on donations given to the club via the gift aid scheme, where the donor has paid tax.  This means an extra 28 pence for every £1 donated.

Full details of the benefits of CASC status are available on the Inland Revenue website (see link below).

How to register as a Community Amateur Sports Club

Applications to register as a CASC should be directed to:

Inland Revenue Sports Club Unit

Meldrum House

15 Drumsheugh Gardens

Edinburgh

EH3 7UK

0131 777 4147

The decision on whether or not to grant CASC status is entirely a matter for the Inland Revenue and neither the Scottish Executive nor the applicant's local council have any locus to intervene in individual cases.  Broadly speaking a club is likely to qualify if it meets the following criteria:

1)       Membership of the club is open to the whole community;

2)       The club's facilities are open to members without discrimination;

3)       The club's constitution prevents profits of the club being distributed amongst members;

4)       The club provides facilities for and promotes the participation in an eligible sport;

5)       The club's constitution provides that on dissolution any net assets of the club are used for approved charitable or sporting purposes.

The following link takes you to the Community Amateur Sports Club section of the Inland Revenue website http://www.inlandrevenue.gov.uk/casc/index.htm .  This provides further detailed guidance on the qualifying requirements for CASC status and the registration process.  The Inland Revenue may require a club to amend its constitution in order to meet the qualifying criteria.  Should any club be asked to meet such a requirement it should, in the first instance, seek assistance from the appropriate governing body of sport.  If assistance is unavailable from that source clubs should contact the Scottish Sports Association which will provide a model constitution that can be adapted to the individual circumstances of the club.

The Inland Revenue will write to a sports club to tell it if its application has been successful and, if so, the date from which the club is registered as a CASC.  Each CASC will be given a unique identifier number.

Sports Clubs who currently receive 80 per cent or more discretionary rate relief

On receipt of the letter conferring CASC status from the Inland Revenue, the sports club should write to its local council enclosing a copy of that letter.  If a sports club misplaces the letter from the Inland Revenue, it should still write to its local council to tell them that the club is CASC registered.  The Inland Revenue website contains a list of all clubs that are registered as CASCs and the club's local council can check the Inland Revenue website.  This will ensure that the sports club will continue to receive at least 80 per cent discretionary rate relief effective from 1 April 2004.

A number of councils currently grant more than 80 per cent discretionary rate relief to sports clubs.  It will be entirely a matter for each council to decide whether or not they will continue to grant rate relief above the 80 per cent level.

Sports Clubs who currently receive less than 80 per cent discretionary rate relief

On receipt of the letter conferring CASC status from the Inland Revenue the sports club should write to its local council enclosing a copy of that letter.  If a sports club misplaces the letter from the Inland Revenue, it should still write to its local council to tell them that the club is CASC registered.  The Inland Revenue website contains a list of all clubs that are registered as CASCs and the club's local council can check the Inland Revenue website.  The council will make the necessary adjustment to the sports club's rates bill.

Yours sincerely

Alan Miller
Public Affairs Manager

 

Note: In light of the Cullen Report on the Dunblane tragedy, some councils decided that sports clubs associated with the sport of shooting would not receive any discretionary rate relief.  Sports clubs associated with the sport of shooting who are not currently in receipt of discretionary rate relief should contact their local council to establish what their council's policy is on this matter.