More money for grassroots sport and recreation following tax reform
The Sport and Recreation Alliance has pushed for and successfully achieved a reform of corporation tax rules which means that expenditure on grassroots sport and recreation is now tax deductible. This will release more money for national governing bodies to put into grassroots activity.
There are benefits for grassroots clubs too as any money companies (both large and small) donate to grassroots sport and recreation will attract the relief. The reform has been passed into law in the new Finance Act and the relief is available for any expenditure incurred from 1 April 2017.
What does it mean for clubs and other grassroots sport organisations?
• Direct expenditure on qualifying grassroots activity (up to a limit of £2,500) by commercial organisations (e.g. sponsors, partners etc.) is deductible when calculating profits for corporation tax. This should help save some clubs tax and make investment into local grassroots sports more financially appealing for businesses.
• Make sure you deduct qualifying grassroots expenditure by your club if it has profits liable to corporation tax
• Use the new relief to attract donations from local businesses to support your activities - these companies will benefit from the relief on any donation they make up to the £2,500 limit
• Try to attract as many donations from businesses as you can - there is no limit to the number of donations you can receive under the rules.
What does it mean for national governing bodies?
• Grassroots spending is now deductible when calculating profits for corporation tax - this should help free up money for grassroots activities.
• Make sure you deduct qualifying grassroots expenditure when calculating your profits for corporation tax
• Leverage the new relief to attract corporate donations to support grassroots investment
• Support your clubs to maximise the relief to help their activities including through donations from local businesses.
To find out more on this article by the Sport and Recreation Alliance please click here; HTTPS://WWW.SPORTANDRECREATION.ORG.UK/NEWS/PARLIAMENT/CORPORATION-TAX-REFORM-PROVIDES-BOOST-TO-GRAS