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Ms Francene Graham
Scrutiny Unit
Committee Office
House of Commons
7 Millbank
London
SW1P 3JA
2 July 2004
OurRef: RKB/T55(E)
Dear Ms Graham
Draft Charities Bill
I am a tax partner at Deloitte, specialising in advising
the sports sector. I am writing in a personal capacity with my
views on one particular aspect of the draft Bill.
Over the past five years I have been working with
sports representative bodies to secure valuable tax concessions
for local sports clubs. I was a member of the working party established
in 1999 by the Department for Culture, Media and Sport, whose
other members were: Bates Wells & Braithwaite, Sport England,
the National Playing Fields Association, and the Central Council
for Physical Recreation. The main objective of the working party
was to convince Government that tax incentives should be introduced
for sports clubs open to the local community.
Our efforts have been successful. in the Finance
Act 2002, the Government introduced tax incentives for sports
clubs that registered as Community Amateur Sports Clubs (CASCs)
by granting them exemption from corporation tax, subject to certain
limits, and the ability to attract donations from individuals
under gift aid. Subsequently, the Local Government Act 2003 provided
80% mandatory business rate relief for registered CASCs. The registration
process is simple and the Inland Revenue deals with registration
both quickly and efficiently. This has been extremely attractive
to clubs. The new CASC scheme has been a great success, with over
1,500 clubs out of an estimated eligible population of 40,000
registering to date. Registration has been growing at 20% per
month compound over the last four months.
I was pleased to note the intention of the Bill to
recognise the significant contributions that amateur sport makes.
However, I have a concern that the draft Bill might well require
clubs that have registered as CASCs to register as charities following
the new meaning of charity within clause 2(2). Clubs are currently
able to register either as a charity or under the CASC
Audit Jax Consulting Corporate Finance regime. Those
that have registered as CASCs have taken a conscious decision
to do so rather than register as a charity. I firmly believe that
the current choice should continue for clubs and that the draft
Bill should be clarified and amended as necessary to allow clubs
registered as CASCs or considering such registration not to be
obliged to register as a charity.
If the Bill is implemented as currently drafted,
it could have a very negative impact on clubs, particularly those
that previously could choose their status. Trust and confidence
would be lost, since a significant amount of advice and publicity
has been given thus far to encourage clubs to register as CASCs.
I therefore strongly urge the Joint Committee, which is considering
the draft Bill, to recommend that an opt-out for CASCs be included.
I should be very happy to provide any further information
or evidence should this be required.
Yours sincerely
Richard Baldwin
Partner
Deloitte & Touche LLP
cc via email to: scrutiny@parliament.uk
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