News – Summer 2018
Make the most of Gift Aid
In order for a CASC to claim Gift Aid, a valid declaration must be obtained from the donor. HMRC need to be able to trace the donor in order for the Gift Aid claim to be valid. For on-going declarations, HMRC therefore recommend CASCs check with the donor periodically that their details are up to date to ensure the Gift Aid can be claimed. A CASC can also use online giving providers to collect donations from individuals and Gift Aid without the need for the club itself to obtain a Gift Aid declaration. The charges levied to the CASC by the providers vary which will reduce the net donation to the CASC. Please see here for more information on both Gift Aid and the Gift Aid Small Donations scheme.
Making Tax Digital for VAT
HMRC have released further information on the new Making Tax Digital for VAT requirements. Sports clubs which are VAT registered with taxable supplies above £85,000pa will generally have to keep records digitally and provide information to HMRC using specialised functional compatible software for VAT reporting. HMRC have produced a VAT notice here and a stakeholder communications pack here that provides further information on the requirements. There are generally no exemptions if a sports club is a CASC or a charity so these clubs, if applicable, should check their current accounting and record keeping procedures to ensure they will be able to comply with the requirements of MTD for VAT which is due to come into force on 1st April 2019.
Gift Aid and Gift Aid Small Donations scheme
A reminder that sports clubs registered as CASCs cannot claim Gift Aid on membership, playing fees and subscriptions. However, CASCs can use both the Gift Aid and the Gift Aid Small Donations scheme to claim extra funds to go towards the clubs’ running costs. As an example, £100 donated from an individual to a CASC can allow the club to claim an extra £25 in Gift Aid back from the Government (subject to conditions). Once a club is successfully using Gift Aid, it can also use the Gift Aid Small Donations scheme (subject to conditions). HMRC do carry out periodic Gift Aid inspections to check claims are made for the correct amounts, represent payments that qualify and are backed up by valid Gift Aid declarations with a clear audit trail.
VAT repayments received from HMRC for charges by clubs to non-members for their use of the clubs sports facilities should be subject to Corporation Tax (CT) if the repayments are not passed on to those who bore the burden of the VAT. The repayments should be reported on CT returns (CASCs benefit from certain useful Corporation Tax exemptions). For the purposes of the CASC qualification conditions however, the VAT repayment should not count towards the £100,000 income condition limit.