These new plans will allow amateur sports clubs to earn up to £50,000 in tax free trading income and £30,000 in tax free rental income – for example, when the clubhouse is rented out for a birthday party.
All clubs charging over £10 per week in membership fees will be eligible to become involved in the scheme, providing they offer discounted membership to low income families.
Clubs will also be able to deduct additional travel and accommodation expenses for key players or trainers.
But those clubs must charge no more than £31 per week in subs in order to be entitled to the relief.
The Government has stated that over 40,000 small clubs can benefit from the scheme if they sign up to a plan to register for corporate gift aid.
At present there are only 6,000 sports clubs enrolled in the Government’s Community Amateur Sports club programme due to the intricacy of being vetted by HMRC officials.
The Government hopes that these changes will help to streamline the process and increase the amount of clubs which can join the scheme and benefit from the tax breaks.
But one deterrent could be the increasing number of high-profile HRMC investigations with the larger sports teams across the country.
Recently two Nottingham-based rugby clubs – Nottingham Rugby and Eastwood Town – appeared in court within hours of each other over winding-up petitions.
In Nottingham Rugby’s case, HMRC issued the petition over unnamed tax debts, but their representatives asked the Registrar to throw out the petition with an order that the club pay the legal fees and court costs incurred by the tax authorities.
Nottingham Rugby CEO Simon Beatham has insisted that the tax bill was paid, but it simply did not clear in time.
“It was a debt that we settled in good time and the club was never in danger of being wound up and we continue to move forward,” he said.
“But, with HMRC, you have a due date and if you miss it as a sports club by even just a day then it has to go to court.”
In the case of Eastwood Town, the winding-up petition was adjourned for 56 days at the request of HMRC.
HMRC lawyers stated that extra time was required for “further discussions” with Eastwood Town concerning their debt.
If you are worried that HMRC may start looking into your club’s tax affairs then seek advice immediately.
KinsellaTax are here to give you support should HMRC begin an investigation into your affairs. Don’t leave it too late. Call us now on 0800 471 4546.