Registering sports club with HMRC

skateykatey

Hoping I've posted this in the correct section.

Basically, I'm involved with a sports club with about 45 members. And I've just discovered that it's not registered with HMRC! I've been tasked with finding out if this is going to be an issue. The club has been running for approx 5 years.

The profit is low, approx 6k a year. This is made up of sub payments and any extras we make by selling cakes/raffles etc less the cost of hall hire and subsidising transport costs if we have a game some distance away.

We're not a charity and can't see us getting charitable status any time in the future.

I've read up on CASC's and we'd qualify on the turnover and sports qualifying condition. We do discriminate to an extent in that it's age restricted to over 18's only owing to safety reasons. The benefits of CASC's wouldn't affect us so I don't think it's anything worth exploring.

My query is, do we need to register with HMRC even if we don't go down the CASC route.

Thanks in advance

Savvy_Sue

I'm not sure there's any advantage or requirement to register with HMRC unless you want the Gift Aid possibilities.

However, my advice would be to get advice from your parent organisation, assuming there is one, or your local voluntary organisation.

chrismac1

The requirement to register or not depends on the nature of your trading. Some clubs "trade" only with their members, some with the world at large. Only trading with the world at large can give rise to a corporation tax liability. Some concrete examples:

1. In general golf clubs and cricket clubs may not have to register. They can be set up to trade only with members. To do this, all guests must sign in as temporary members. So for example if they run a bar all such guests must be signing in. Some clubs see this as a load of hassle and just register.

2. With cricket, there is often another reason why they end up registering. They often pay overseas professionals to come for the season and have various contracts accordingly.

3. I have helped my local fishing club with their corporation tax returns. Although quite a small club it owns rights to part of the local river, which is good for trout fishing here in the Lake District. They market that and get tourists hiring it, this is trade with the outside world.

Some committee members of the local cricket club approached me 2 or 3 years ago with regard to CASC status. Other than Gift Aid on donations there seemed few benefits. They would have had to change the club constitution and were confident that about 20 old guys would vote it down, so did not go ahead.

But the CASC rules have been changed since then, so it is possible that the same club would make a different decision now.

First you need to address the issue of whether your club is trading with the outside world. If you decide that it is not, my advice is to document the reasons why and report this to the next committee meeting. One of the issues I had with the Cricket Club is that the Treasurer was worried HMRC would come after him personally. By reporting to the Club Committee we could at least document that all the members knew about the issues, so he did not resign and I think remains the Treasurer.

chrismac1

http://www.freshbusinessthinking.com/news.php?NID=18614

Golf clubs have come under attack by HMRC as this article shows. So have cricket clubs.