CASC Status - The financial impact

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A presentation made at the BMC huts seminar spelling out the financial impact of attaining CASC status.

A presentation made at the BMC huts seminar spelling out the financial impact of attaining CASC status.

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  • 1. CASC Status
    The Financial Impact
  • 2. Corporation tax
    The following organisations are liable to Corporation Tax:
    Members’ clubs, such as social clubs and holiday clubs
    Societies, such as friendly societies and provident societies
    Other unincorporated associations
  • 3. What is taxable?
    The following are all subject to Corporation Tax:
    Bank interest received
    Capital gains
    Rent from huts/property (to non members)
    Profits from trading i.e. selling guide books, calendars or clothing (to non members)
  • 4. What is taxable? (continued)
    The non members clause depends on a clubs constitution! So you may be liable to pay Corporation Tax on:
    Surpluses made on membership fees
    Surpluses from fundraising events
    Corporation tax is charged at 21% for the first £300,000 of profit. 20% from 1 April 2011.
  • 5. Corporation tax – ‘small clubs’
    HMRC treat 'small clubs' as dormant for Corporation Tax purposes.
    To qualify, both of the following must apply:
    Your organisation's annual Corporation Tax liability must not be expected to exceed £100
    You run your club or organisation exclusively for the benefit of its members
    HMRC will review this at least every five years.
  • 6. Corporation tax – ‘small clubs’(continued)
    Additionally, and for each year your club or organisation is treated as dormant, it must not have any:
    Trading losses available for offsetting against profits
    Chargeable gains or disposals
    Anticipated payments from which tax is deductible and payable to HMRC, i.e. PAYE
  • 7. Corporation tax – ‘small clubs’(continued)
    Most clubs and unincorporated organisations with very small tax liabilities are covered by the exemptionexcept forthe following:
    Privately owned clubs run by the members as a commercial enterprise for personal profit
    Friendly societies
  • 8. Casc benefits
    No Corporation Tax to pay on:
    Trading profits, if the turnover is no more than £30,000 per year
    Income from letting property, if the rent is no more than £20,000 per year
    Any interest received
    Any capital gains made
  • 9. Casc benefits (continued)
    Mandatory 80% rates relief
    The ability to claim Gift Aid on voluntary donations
  • 10. Gift aid
    Gift Aid is a scheme for Charities and CASC’s to maximise the value of donations received.
    It is worth 25p for every £1 donated
    There is a temporary “top up” of 3p for every £1 donated until 5 April 2011
    As well as benefitting the CASC, if the donor pays higher rate tax they can claim tax relief on Gift Aid donations.
  • 11. Gift aid – what you can claim?
    Can be claimed on voluntary donations only, but……
    Membership fees
    Auctions/kit sales
  • 12. The benefits nobody talks about!
    Access to the following financial/fundraising institutions:
    CAF Bank – Banking, insurance & investments
    CTT – Charities Technology Trust
    Charities Trust – eBay for charity/Everyclicketc
    Virgin Money Giving
  • 13. The numbers
  • 14. Useful links – CASC Forum group