News – Spring 2018
De-registered CASCs can re-apply
Clubs that have been de-registered from CASC status as a result of HMRC’s review process, which this newsletter has reported on, can re-apply for CASC status if they satisfy all of the qualifying conditions. These conditions include the £100,000pa income test, the 50% participation test and the cost of membership test, all of which were introduced from 1st April 2015. Clubs may be unaware they have been de-registered and therefore not entitled to the benefits of CASC status which include 80% mandatory Business Rate Relief, Gift Aid on donations from individuals and certain Corporation Tax exemptions. Please contact us immediately if your club has any concerns about this.
Making Tax Digital for VAT
CASCs which are VAT registered will generally have to comply with the new Making Tax Digital (MTD) requirements from 1st April 2019. HMRC commissioned research on MTD which suggests that small businesses (which include CASCs) are largely unaware of the new MTD requirements. VAT registered CASCs with taxable supplies above £85,000pa will generally have to keep records digitally and provide information to HMRC using specialised software for VAT reporting. Since CASC's will not be exempt from MTD for VAT reporting they should review their current accounting and record keeping procedures to ensure that they are adequately prepared for when MTD for VAT comes into force.
Gift Aid and Gift Aid Small Donations Scheme
HMRC is urging CASCs and charities to make sure they get the most out of Gift Aid as they are potentially missing out on millions of pounds in extra funding. HMRC wants to improve the take up of Gift Aid and are also encouraging CASCs and charities to use the Gift Aid Small Donations Scheme which provides a 25% top up on cash donations of £20 and under without the need to complete gift aid declarations (subject to conditions). Please see here for further information on Gift Aid and the Gift Aid Small Donations Scheme.
Corporation Tax deduction for spending on grass roots activities
A change which may benefit CASCs is the introduction of a corporation tax deduction for spending on grass roots activities. Many clubs are unaware of their corporation tax obligations and larger clubs registered as CASCs may still be liable to CT if their gross trading income exceeds £50,000pa and/or gross rental income exceeds £30,000pa. In this situation a deduction from taxable profits of up to £2,500pa is now available from 1st April 2017 for qualifying grass roots expenditure subject to conditions. This can be worth up to £475 pa to CASCs paying CT.
PAYE and VAT
CASCs are potentially exposed to other taxes including PAYE/NIC and VAT. There have been recent developments in both which may impact CASCs. As regards the former, HMRC continues to challenge self employed status, including of certain football referees at higher levels. VAT can impose an unwanted cost burden on all clubs particularly on facility improvement. HMRC’s current viewpoint is that VAT is generally due (and not fully recoverable) on the construction of new clubhouses for use by the CASC and the local community. CASCs which are registered for PAYE and/or VAT should review their procedures as soon as possible to ensure they are compliant.