Social club assets - distributed between members

pmcx9
pmcx9 Posts: 169 Forumite
in Old Threads
I am the treasurer of a small works social club. All our members are being relocated to various parts of the company although the site is going to remain with a few new personnel brought in. We have a few physical assets that we intend to leave to the new people so we aren't exactly closing down our social club just passing it on.

We have a largish sum of £5000 built up over many years from social gatherings and a membership of 25. We are proposing to have an EGM and distribute this money between the 25 members evenly I suppose as a gift.

Our employers are unhappy with this.

Is there any foreseeable issues or tax implications with this?

Thank you.

Comments

  • miduck
    miduck Posts: 1,800 Forumite
    How is the social club set up for tax purposes - is it a charity?
  • pmcx9
    pmcx9 Posts: 169 Forumite
    No. Our income is from a very small works bar and tuck shop and subscriptions. Our outgoings are to maintain a TV and gym equipment at work.
    We used to have socials up until about 5 years ago frequented by both members and non members and that is how we built up the cash asset but have ran at break even for last 5 years.
  • antrobus
    antrobus Posts: 17,386 Forumite
    miduck wrote: »
    How is the social club set up for tax purposes - is it a charity?

    Or how is the social club set up, period?
  • dancingfairy
    dancingfairy Posts: 9,069 Forumite
    I'm not sure you can just 'give' people the money to be honest. As has been said, it's going to be depend on the legals of the club and how it was formed etc. For the sake of that much money it might be worth getting some legal advice? Do you know a friendly accountant/legal person that could take a look over things for you?
    df
    Making my money go further with MSE :j
    How much can I save in 2012 challenge
    75/1200 :eek:
  • pmcx9
    pmcx9 Posts: 169 Forumite
    We have always gifted £50 for weddings, retirements or births to members so I had assumed gifting £200 would not be an issue but our employers are unhappy with us distributing the monies and suggested gifts should be taxable.

    I am racking my brains to think of a contact with accounting knowledge.
  • System
    System Posts: 178,090 Community Admin
    Photogenic Name Dropper First Post
    Might it be simpler if you closed the club, donated the physical assets to a new club, and distributed the money to the old club members?
    There will be clauses in the club's constitution detailing what happens if the club is wound up - you just have to make sure you comply with them.
  • pmcx9
    pmcx9 Posts: 169 Forumite
    Unsuprisingly our employers rewrote the guidance document for social clubs six months ago stipulating that assets of a folded club must be donated to charity as they have a large social club and our workplace was merely a subgroup of that social club
  • CAB_National_Representative
    CAB_National_Representative Posts: 220 Organisation Representative
    pmcx9 wrote: »
    I am the treasurer of a small works social club. All our members are being relocated to various parts of the company although the site is going to remain with a few new personnel brought in. We have a few physical assets that we intend to leave to the new people so we aren't exactly closing down our social club just passing it on.

    We have a largish sum of £5000 built up over many years from social gatherings and a membership of 25. We are proposing to have an EGM and distribute this money between the 25 members evenly I suppose as a gift.

    Our employers are unhappy with this.

    Is there any foreseeable issues or tax implications with this?

    Thank you.

    Hi pmcx9 - our CAB representatives aren't covering this topic at the moment. As others have suggested, we'd recommend that you get expert advice on these issues - and we'd also expect what's to be done, to be dependent on how the social club was set up.

    If it's of any help, I came across this information on the internet - http://www.sterlingfinance.net/social-clubs.html. Pleae note however that, in giving you think link, this does not mean that Citizens Advice endorses either the information on the website or any products & services that the company may offer.
    “Official CAB Representative
    I am an official representative of CAB. MSE has given permission for me to post in response to questions on the CAB Board. You can see my name on the companies with permission to post list. If you believe I’ve broken any rules please report my post to forumteam@moneysavingexpert.com as usual"
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