Community amateur sports clubs (CASCs) can operate under an unincorporated or incorporated structure. However, incorporating your club presents significant advantages, such as limited liability and credibility.
In this article, we’ll explore how to set up and incorporate a community amateur sports club as a private company limited by guarantee. From organising roles to applying for CASC status, this guide will take you through everything you need to know about forming and managing a compliant community amateur sports club. Let’s get started.
What is a community amateur sports club (CASC)?
A community amateur sports club (CASC) is a local sports club that is open to the whole community. It is designed for public benefit, to facilitate certain sports, and to actively encourage people to get involved.
Qualifying sports clubs can apply for CASC status through HMRC’s Community Amateur Sports Club Scheme and benefit from a range of tax reliefs, such as Gift Aid and business rates relief.
Sports club vs charity
While both are not-for-profit organisations, there are some important differences between community amateur sports clubs and charities. Firstly, a charity has charitable status, is registered with HMRC, and is regulated by the Charity Commission.
Meanwhile, community amateur sports clubs are not regulated by the Charity Commission and are only registered with HMRC. For this reason, charities are subject to greater regulatory control than sports clubs, but they are also eligible for greater tax benefits.
Registered community amateur sports clubs cannot register as a charity for tax purposes. To convert, it would need to be closed down and its assets transferred to a new charity.
Organising your community amateur sports club
Exactly how you organise the club will depend on the activity that it will be doing and the number of participants that will be taking part. Let’s look at a grassroots 11-side Sunday league football team as an example.
Assign roles
For the club to function correctly, several different roles will need to be filled. Whilst these can all be taken on by one person, it’s probably a better idea to share these roles.
Firstly, you will need a chairperson. Typically, this would be the individual who had the idea of setting the club up, or ‘the organised one’ from a group of friends. This person would be in charge of managing the club as a whole (although not necessarily the on-field action), setting the rules and regulations, and chairing meetings.
A secretary is required to take care of the various administrative tasks required to run the club. This could involve finding an appropriate league to participate in and then attending league meetings, sourcing new players when necessary, and ensuring the smooth running of the club.
The secretary will also often act as fixture secretary. This is the person who is responsible for organising the matches. This entails booking pitches and referees, liaising with the opposition, and cancelling and rebooking matches, as and when required.
Whilst all the roles are significant to ensure the efficient running of the sports club, perhaps the person with the most responsibility is the treasurer. This person is tasked with all the club’s money-related matters, including collecting ‘subs’ from the players (and looking after these) and paying the league, pitch, and referee fees.
Furthermore, they may also work with the secretary in filing the club’s annual accounts (as an incorporated business) and taking care of financial obligations. As this would suggest, the treasurer should be highly trusted, reliable, and adept at managing money.
Register as a private company limited by guarantee
Now that you’ve determined the structure of your community amateur sports club, it’s time to register as a private company limited by guarantee. This structure is best suited for non-profit organisations, which are controlled by guarantors (also known as ‘members’) and managed by at least one director.
Incorporating your sports club is not essential; however, it does offer the following benefits:
- The company is a separate legal entity. This means it can enter into contracts as if it were a person and it is responsible for its own debts.
- Members have limited liability, whereby they are only responsible for the company’s debts up to the guaranteed amount.
- It is registered with Companies House and regulated by the Companies Act 2006. This gives the company a great deal of credibility and trustworthiness.
To protect your sports club and its members, we highly recommend registering as a private company limited by guarantee. With 1st Formations, you can do this for just £69.99 +VAT and be incorporated in as little as a few hours.
- How to form a private company limited by guarantee
- Life after incorporation
- How to register a company in 4 simple steps with 1st Formations
Our guarantee package covers the Companies House filing fee, an email copy of your Certificate of Incorporation, guarantor certificate(s), and memorandum and articles of association. It also includes a printed version of your incorporation documents, bound memorandum and articles of association, a free domain name, and free access to our Online Company Manager portal.
Take a look at our guarantee package in more detail and register online in just 4 simple steps. Alternatively, give our team a call if you’d prefer to order by phone.
CASC eligibility criteria
Before you can register for CASC status, your club will need to meet certain eligibility criteria:
1. Be open to the whole community
Your sports club facilities and membership must be open to the whole community, regardless of ethnicity, nationality, sexual orientation, religious beliefs, age, and ability.
Membership fees must also be affordable. This means you cannot charge more than £31 a week (or £1,612 per year). If the membership fee exceeds £10 a week, you must provide financial support to those who can’t afford to sign up (e.g. a discount).
2. Be open to all without discrimination
The sports club must not discriminate against its members (owners) or between classes or categories of members. There are some caveats to this, whereby you may restrict certain membership classes from accessing the club’s facilities on certain days or times.
However, you must not completely exclude them from full participation in the community sports club. Your club may also accommodate single-sex members, juniors, or members with disabilities.
3. Be organised on an amateur basis
To be considered a community amateur sports club, you must:
- Not generate a profit
- Any income you do make must be reinvested in the club (e.g. promoting participation and providing eligible sports facilities)
- Not pay more than £10,000 in total to all players in a year
- Only pay expenses for matches and tours where players take part in and promote the club’s sport(s)
In addition, your club must only provide the ordinary benefits associated with an amateur sports club. These are:
- The use and maintenance of club-owned equipment
- Sourcing and reimbursing qualified sports coaches
- Insurance
- First aid
- Post-match refreshments
- The reimbursement of reasonable expenses incurred by members and/or players travelling for matches and tours
4. Facilitate one or more eligible sports
The main purpose of a community sports club is to encourage participation in and provide the facilities for eligible sports. These are activities that are recognised by Sport England. The club and its sports must also be accessible to all abilities, from beginners to experienced players.
5. Meet the income condition
A community amateur sports club can earn up to £100,000 per accounting year (or £50,000 if your club has a 6-month accounting period) from non-member trading and property income. This is known as the ‘relevant threshold’.
If your club exceeds this condition once registered as a CASC, you’ll need to take the appropriate steps to reduce this income. Otherwise, you will lose your CASC status and its associated tax benefits, and you may face a charge based on the club’s assets.
6. Be run by a ‘fit and proper’ person
A CASC official (e.g. a club manager, chairperson, or treasurer) has general control over the club’s administration procedures. This individual must be deemed ‘fit and proper’, as they’ll be tasked with ensuring that club funds and tax reliefs are not misused.
HMRC may conclude that you are not a ‘fit and proper’ person if you have been involved in tax fraud or avoidance, identity theft, or other fraudulent activity, or if you have been disqualified from acting as a charity trustee or company director.
For full details on what constitutes a fit and proper person, its restrictions, and to sign the declaration, visit the gov.uk website.
7. Meet the location conditions
To register as a new community amateur sports club, the club must be based in the UK.
8. Have a suitable governing document
Finally, your community amateur sports club must have a governing document – these are your articles of association. Their purpose is to set out how your sports club will be run and express how it satisfies and complies with the above eligibility criteria.
It must also declare that, if the club were to dissolve, any leftover assets are to be used only by another registered CASC, charity, or related community sport.
Visit the HMRC website for guidance on how to adopt CASC clauses, or contact our Company Secretarial Team for help with bespoke articles by email at [email protected].
Apply for CASC status
Once you’re confident that your sports club meets the above criteria, you can apply for CASC status. An authorised/official person will need to complete a CASC (A1) application form and return it to HMRC, along with the relevant documents supporting your eligibility.
You can apply online via your Government Gateway account. If you’re new to this service, you can either create a new account or apply by post. Please note that once you’ve submitted your application form, you won’t be able to withdraw it.
HMRC will then review your application and check that your sports club meets the qualifying conditions. Upon application, you’ll need to prove that your club has already enforced these conditions – your application will not be successful if you submit a plan of how you’ll introduce these practices at a later date.
Once registered, you’ll need to ensure that your club continues to meet all of the above conditions to maintain its CASC status.
Tax considerations for community amateur sports clubs
UK-based community amateur sports clubs are entitled to certain tax relief on ‘qualifying purposes’. This is the money spent on promoting participation and providing facilities for eligible sports.
If your club’s income is used on qualifying purposes, then you won’t pay tax on:
- Bank interest
- Gift Aid donations
- Capital gains
- Trading profits (if your annual turnover is below £50,000)
- Annual income of up to £30,000 from renting out property
In addition, if your income comes from members with full voting rights, then you also won’t pay tax on income from membership fees, or profits from selling refreshments during the club’s sporting activities.
Any money that is spent on non-qualifying purposes will incur a tax charge. For this, you’ll need to file a Company Tax return for Corporation Tax with HMRC, which you can do via your Government Gateway account.
Find out more about tax rules for community sports clubs on the gov.uk website.
Running a compliant sports club
After registering, members and directors will have certain ongoing responsibilities. Firstly, to ensure that your club retains its CASC status, it must adhere to the eligibility conditions outlined in this article at all times.
Secondly, as a limited by guarantee company, you’ll have certain obligations to ensure your sports club continues to comply with the Companies Act 2006. At the end of each financial year, the director(s) must file full annual accounts with Companies House.
This is an overview of your organisation’s financial standing for the past 12 months. The first set of accounts is due 21 months after your incorporation date. All subsequent accounts should be filed 9 months after the company’s financial year-end.
Finally, you need to register for Corporation tax with HMRC. In instances where tax payment is due, you’ll have 12 months after your accounting period to file a Company Tax return. If your company doesn’t owe any tax, you’ll need to notify HMRC 9 months and 1 day after your accounting period.
On top of this, the directors of your community amateur sports club are responsible for following the company’s rules (as set out in your governing document), keeping company records, and reporting any changes (using form ChV1).
Thanks for reading
So, there you have the key steps to setting up a community amateur sports club. If this is something you’re interested in doing, remember to start by assigning key roles and defining how the club will arrange games and attend matches.
Then, apply with HMRC to receive certain benefits, and incorporate your club with 1st Formations for financial protection and limited liability.
Thanks for reading. If you have any questions about this topic, incorporation, or private companies limited by guarantee, let us know in the comments below.
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