This was held at Bagley BC on Monday 8th January 2018 and you can now view/print the Minutes of this meeting by clicking
the appropriate box in the green area to your left.
Should A Club Become a CASC?
I have been approached by a club asking for clarification and advice on whether they should consider applying to become a CASC (Community Amateur Sports Club). I am not an expert on the matter but when I was Secretary of Criccieth BC in North Wales some 14 years ago, the club looked into it and decided that it was well worth us becoming a CASC and so we registered.
It is likely that if a club ever applies for grants, then CASC status might well be mandatory. As far as I know, Craven Arms, Meole Brace, Oswestry Church and Wem Albion are all CASC’s and there may well be others in our League.
The Community Amateur Sports Club scheme was introduced by the government in 2002 as an option for sports clubs to register with HMRC to receive 'charity type' tax reliefs provided the club meets certain qualifying conditions. The key benefits of CASC status for a typical bowling club include:
80% mandatory business rate relief
Gift Aid of 25% on individual donations to the club providing donor pays tax
Exemption from Corporation Tax (CT) on profits from trading income if less than £50,000 per annum
Many clubs wrongly assume that they are exempt from paying corporation tax but this is not necessarily the case. Clubs need to identify sources of income that are liable to CT but are allowed to deduct the costs of earning the income and gains under the normal CT rules. Member income is generally not taxable but income from non-members is, although this can be a difficult area and will depend on whether the club is trading. However, taxable sources of income and gains would normally include:
Investment income e.g. interest on deposits with the bank
Income from property e.g. rental income
Trading income from non-members e.g. from bar and food sales
Regular fund raising events
A visit from an HMRC inspector might well result in a club receiving a substantial bill for back tax. However, if the club is registered as a CASC then they are exempt from paying CT providing income is under £50K which is very likely. If the club is lucky enough to receive donations from anyone who is a taxpayer then they can claim an extra 25% on the amount donated. The only minor downside of being a CASC is that if the club ever closes down, the monies and assets left in the club cannot be distributed to the club members and have to be given to other CASC’s or a registered charity.
So my personal advice would be to seriously consider registering as a CASC since you are free of the possibility of ever being assessed for corporation tax and you can claim Gift Aid on donations. The fact that if the club is ever wound up then the monies and assets cannot be distributed to the membership is not worth worrying about since the usual reason for a club to close is that it has run out of money! However, before taking the plunge why not seek professional advice perhaps from a chartered/certified accountant or a solicitor.
Should a Club Become a Company Limited by Guarantee?
Many clubs will be unaware that in the event the club becomes insolvent (perhaps due to a claim for damages against the club which is not covered by insurance) then the members of the club can be held legally responsible for paying the claim.
Insurance companies are more and more looking to limit their liability by adding new clauses to the small print in the policy documents which you are instructed to read and by doing so agree to the changes. Also we now live in a blame culture society whereby for every accident which happens is somebody elses fault and there are plenty of ambulance chasing lawyers who will take on such claims on a ‘no win, no fee’ basis. Perhaps somebody falls down some steps due to a wonky handrail collapsing – it is likely that the Loss Adjuster investigating the claim would deem the club to be responsible for the accident since the handrail was not fit for purpose and as such not covered by the policy.
Fortunately, there is an easy solution to this problem by the club changing its status from being an unincorporated body to becoming a Company Limited by Guarantee which is an incorporated body. Such companies are most often formed by non-profit organisations such as sports clubs, whose members wish to have the benefit of limited financial liability.
A company limited by guarantee does not have any shares or shareholders but is owned by guarantors (the members of the club) who agree to pay a set amount of money towards company debts – usually £1.
Furthermore, there will generally be no profits distributed to the guarantors as they will instead be re-invested to help promote the non-profit objectives of the company (club).
The two main benefits of becoming a company limited by guarantee include:
The company is a distinct legal entity from its owners, and so the company (and not the members) is responsible for its own debts.
The personal finances of the company’s guarantors are protected. They will only be responsible for paying company debts up to the amount of their guarantees which will generally be set at £1.
The main downside is that the annual accounts have to be audited by a chartered/certified accountant (likely cost £300 per year) and then filed electronically online with Companies House.
Much more detailed and easy to understand information can be found by Googling online.