Complexity could limit take up of sports club tax reliefs

The Association of Taxation Technicians (ATT) has warned that the conditions for local sports clubs to qualify for tax reliefs are becoming too complex. Clubs could need to monitor up to 16 different aspects of their operation to make sure they comply with proposed regulations. This will add an unwelcome layer of administration for many sports clubs around the country. 

The ATT made its comments in response to HMRC’s latest consultation concerning the eligibility requirement for Community Amateur Sports Clubs (CASCs). CASCs, introduced in 2002, provide a number of charity-type tax reliefs to local amateur sports clubs which meet certain conditions.

Natalie Miller, President of the ATT, said:

“The Association has previously drawn attention to the increasingly onerous conditions to be met by sports clubs to qualify for tax relief. We are disappointed that the latest draft regulations only add to that burden.

“Amateur sports clubs are an important part of British life; they engender a sense of community and help people to keep fit.  They are not designed to operate as de facto auditing centres to ensure that all aspects of their activities, no matter how obscure, fall rigidly within the inexplicably complex CASC eligibility criteria.

“Clubs will now need to keep a tab on up to 16 different aspects of their operations. These include recording travel time to and from away matches, assessing what costs over and above any membership fee a member might need to incur in order to participate in the sport, and possibly even allocating the proceeds from the club’s annual summer fete between receipts from members and non-members. They will also need to differentiate between ‘social’ and ‘active’ members which could involve recording how many times a member assists at Saturday morning training sessions of the junior team. Most clubs rely on volunteers for their administration; they simply do not have the resources to comply with all the regulations that are being proposed.

“The Government has recognised that sports clubs have a key role to play in building on the Olympic and Paralympic legacy but they will be hampered by the near self-defeating complexity of the tax relief criteria; it will discourage clubs from registering.

“We are pleased that HMRC have committed themselves to an education campaign for clubs when the new regulations are introduced, but the indications are that HMRC’s approach will then change to one of compliance checking. In the event of unintended non-compliance, we would like to see HMRC offering guidance rather than threatening withdrawal of CASC status. Commitment to a ‘light touch’ regime would give clubs confidence that they would not lose their CASC registration for a minor breach of these complex rules. The Government has given a clear signal that it sees CASCs as a good thing. These rules need to be applied in line with that recognition.”

Notes for editors

1.        The submission of the Association of Taxation Technicians can be read in full, here

2.        HMRC’s consultation, Community Amateur Sports Clubs – technical consultation, can be read in full here.

3.       Association of Taxation Technicians

The Association is a charity and the leading professional body for those providing UK tax compliance services. Our primary charitable objective is to promote education and the study of tax administration and practice. One of our key aims is to provide an appropriate qualification for individuals who undertake tax compliance work. Drawing on our members' practical experience and knowledge, we contribute to consultations on the development of the UK tax system and seek to ensure that, for the general public, it is workable and as fair as possible. Our members are qualified by examination and practical experience. They commit to the highest standards of professional conduct and ensure that their tax knowledge is constantly kept up to date. Members may be found in private practice, commerce and industry, government and academia.

The Association has over 7,500 members and Fellows together with over 5,000 students. Members and Fellows use the practising title of 'Taxation Technician' or ‘Taxation Technician (Fellow)’ and the designatory letters 'ATT' and 'ATT (Fellow)' respectively.