The Association of Taxation Technicians (ATT) has welcomed the Budget announcement1 that the Government will consult on how to expand Corporation Tax deductions for contributions made by limited companies to grassroots sport.
Michael Steed, President of the ATT, commented:
"This is good news. The Government is recognising the important contribution that local businesses already make to grassroots sport. With 2016 being another Olympics year, it makes sense to harness the increased public interest in active participation in sport by simplifying the relevant tax rules.
"What we think is essential in the consultation is to focus on how funding to grassroots sport by limited companies can be made as simple and efficient as possible. At present, establishing the correct tax treatment of a donation by a company to a small local sports club is not straightforward because of the “wholly and exclusively” rule.
"We think that the proposals should take account of the existing Community Amateur Sports Club (CASC) provisions but what is even more important is that they should enable simple funding for those much smaller sports clubs for whom CASC status is either inappropriate or over-sophisticated.
"One thing that would be very helpful would be a provision that ensured that contributions below a certain level were not subject to onerous qualifying conditions. A contribution of say £500 could make a world of difference to a struggling or newly formed sports team but getting professional advice on its tax treatment could cost a company the same as the contribution itself unless the rules are kept very simple.
“The Chancellor’s reference to childhood obesity (in connection with the proposed sugar levy) adds importance to the encouragement of grassroots sports.
"We look forward to the publication of the consultation so that these ideas can be developed.”
Notes for editors
- The Budget Red Book 2.89 (page 104) reads:
2.89 Consultation on how to expand the support that can be given to grassroots sports through the corporation tax system – The government will launch a consultation on how to expand support that can be given to grassroots sport through the corporation tax system.