Time for recreational clubs to grab tax benefits

ECB has revised its guidance to recreational cricket clubs on the tax benefits to be obtained through registering with the Inland Revenue as a Community Amateur Sports Clubs (CASC) - and stressing the importance of doing so as soon as possible.

The ECB has now published new Guidance Notes - which are available in full via ECB's Cricket Network - Play-Cricket.Com

Since the publication in 2002 of Deloitte & Touche's booklet CASC Tax Options there have been two significant improvements to the reliefs available to CASCs.

These are as follows:

Mandatory rate relief of 80 per cent announced in September 2003
An increase in the tax exempt thresholds for fund-raising and property income announced by the Chancellor of the Exchequer in his Pre-Budget Report on 10 December 2003

Mandatory Rate Relief

The Local Government Act, which received Royal Assent on September 18 2003, provides mandatory rate relief of 80 per cent for CASCs that are registered with the Inland Revenue. Mandatory relief comes into effect on April 1 2004.

Some clubs already benefit from discretionary relief of up to 100 per cent, awarded on a case-by-case basis by the Local Authority. From April 1 2004, registered CASCs are entitled to mandatory relief of 80 per cent. Further relief up to 100 per cent will still be available on a discretionary basis.

Mandatory rate relief brings CASCs into line with their counterparts in the charities sector, who have enjoyed this treatment for some time. Clubs that remain unregistered will have to negotiate discretionary relief or suffer normal business rates as before.

Tax exempt thresholds for CASCs

With effect from April 1 2004, exemption from corporation tax on certain classes of income for registered CASCs will be as follows:

Profits from trading and fund-raising where gross income is less than £30,000pa (previously £15,000pa)
Income from property where the gross income is less than £20,000pa (previously £10,000pa) provided that the income is applied for qualifying purposes.

Since both changes come into effect from April 1 2004, valuable savings can be made by clubs and any clubs not registered will want to review the possibility of registration prior to April 1 2004.