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INCORPORATION - PROTECT THE PEOPLE RUNNING YOUR CLUB Dave Stubley RFU Funding and Facilities Manager PowerPoint PPT Presentation

INCORPORATION - PROTECT THE PEOPLE RUNNING YOUR CLUB Dave Stubley RFU Funding and Facilities Manager Is your rugby club a risky business? Do you know how your club is constituted/legal status of your club?

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INCORPORATION - PROTECT THE PEOPLE RUNNING YOUR CLUB Dave Stubley RFU Funding and Facilities Manager

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Incorporation protect the people running your club dave stubley rfu funding and facilities manager l.jpg

INCORPORATION - PROTECT THE PEOPLE RUNNING YOUR CLUBDave Stubley RFU Funding and Facilities Manager


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Is your rugby club a risky business?

  • Do you know how your club is constituted/legal status of your club?

  • What does that mean to you and your fellow committee members or trustees if a legal claim was brought against the club?

  • The RFU strongly recommends that club/CB should be incorporated to protect its most valuable asset – you, the army of volunteer club administrators


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Incorporation of Rugby Football Clubs

  • Constitutions used by Rugby Clubs currently

    • Unincorporated Members Clubs

    • Limited Company (by guarantee or shares)

    • Industrial and Provident (IPS)

  • Guidance not just aimed at Clubs but CB’s as well


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Incorporation – why incorporate?

  • An unincorporated club has no legal identity of its own

  • As a result if it employs people or undertakes activities (eg organising matches), individuals (usually the Committee) will have to act on its behalf

  • If club holds property, it will have to appoint trustees to do so

  • If claims are brought they would be against Committee members personally, who would be personally liable if the Club’s assets do not exceed the liability

  • Rugby is a contact sport and although personal injury on the pitch is rare it does happen and accidents of any kind can occur in any rugby environment and claims against clubs are a real possibility


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Incorporation – why?

  • “Don’t just imagine that insurance will cover you for all eventualities.

  • Incorporation is the first line of defence, insurance is the second”


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Why incorporate – live example

  • Weymouth RFC

    • Pursued by woman who claimed she damaged her arm while using the bridge over the culvert.

    • Settled out of court

    • Money raised by members and brewery loan to meet the claim

    • Committee members were jointly and severally liable for any claim

    • If it had been a large claim then even house/savings could have been at risk.

    • Club is now IPS and CASC registered


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Incorporation – what form should the club take?

  • Two options for non profit making clubs

    • Company Limited by Guarantee

    • Industrial and Provident Society

  • In either case the Rugby club will have a legal personality of its own and as such can enter contracts, hold property, sue and be sued in its own name.


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Are there disadvantages?

  • Companies and IPS are regulated by Companies House and the Financial Services Authority (FSA) respectively

  • The constitution and accounts will need to be lodged each year – but these have to be filed with the CB anyway

  • The advantages outweigh the disadvantages


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How does a club incorporate?

  • Incorporation involves establishing the new company and then transferring the assets and undertaking of the club to it.

  • Appoint a steering group and decide the timescale

  • Tell your members that it is planned


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Incorporation steps

  • Prepare the Memorandum and Articles using the relevant RFU template/ model rules

  • Look at CASC compliance at same time

  • Apply for clearance from HMRC for the incorporation

  • Prepare the resolution of the members to transfer the assets and undertaking to the new company.

  • Call and hold general meeting in accordance with your rules


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Incorporation – key points

  • Information and model rules on www.rfu.com/community under Club Management section, however

  • Clubs need to take there own legal advice

  • Link it in most cases to CASC registration

  • CD Rom and newsletter distributed to the game


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COMMUNITY AMATEUR SPORTS CLUB (CASC)Save money for your Rugby Club!!


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Barnsley RUFC – an example

  • CASC registered April 2004

  • To date saved £32,000 + in relief from business rates

  • “CASC status hasn’t changed anything we do at the club. Its just made running the club that bit easier financially”


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Ilkey RFC – an example

  • £2000 per year saving from Business Rate Relief

  • Over 2 years received £7,900 in gift aid refunds on 2 donations

  • Have found that trusts that only give to charities have extended this to registered CASC’s

  • “the most important benefit has been ability to claim tax paid at basic rate on all donations under Gift aid. The process is simple …. I can’t understand why all amateur sports clubs have not registered”


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CASC – National Picture

  • 4,882 sports clubs are now registered with an estimated £43.6m worth of savings (Deloitte)

  • 320+ rugby clubs are now registered with an estimated saving of £4,000 per club

  • 1 rugby club has saved capital gains tax on ground sale of £6.5m by being CASC registered


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CASC - Background

  • 2001 campaign for tax benefits for sports clubs provide HMT with 2 amendments

    • Sports clubs could register as charities

    • Sports clubs could register as CASC

  • Schedule 18 of Finance Act 2002 established CASC

  • 2003 Local Government Act registered CASC’s to claim 80% mandatory rate relief

  • 2004 threshold exemption for corporation tax raised


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    CASC – The Benefits

    • 80% mandatory business rate relief

    • Gift aid on individual donations (28p in the £ currently)

    • Corporation Tax exemption on profits derived from trading activities if trading income is under £30k PA


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    CASC – The Benefits

    • Corporation Tax exemption on profits derived from property income if gross property income is under £20k PA

    • Tax free income from interest and capital gains (used for qualifying purposes)

    • Avoidance of Capital Gains on sale of land


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    CASC - Criteria

    • Decision should not be taken lightly

    • Financial advantages for many

    • For some not the best option

    • Link the decision making process to incorporation discussion

    • RFU model rules for IPS and Ltd by Guarantee offer CASC compliant rules that have been agreed with HMT and HMRC


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    CASC - Eligibility

    • Open membership

      • Club must be open to whole community without discrimination

      • Fees must be affordable

  • Club must be Amateur

    • Be non profit making and reinvest any profits back in the club

    • Can only provide ‘ordinary benefits’ of membership

    • Constitution must require assets on dissolution be applied for similar purposes

  • Purpose of club to provide facilities for rugby


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    CASC - Issues

    • Club constitution / model rules

    • “Once a CASC always a CASC”

      • Deregistration provisions can trigger Capital Gains Tax liability

      • This specifically safe guards against future distribution of profit to members

      • But also takes into account clubs that may no longer be adhering to CASC principles


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    How to become a CASC

    • Straightforward

    • Read and discuss the guidance notes from HMRC and decide if CASC registration is right for your club

    • Look at club’s constitution – does it fulfil criteria set out in the guidance notes – make use of RFU model rules

    • If you are happy that CASC registration is right and that the constitution is right complete and submit the HMRC application form


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    CASC – for information

    • Be aware of ‘Subs for Clubs’ campaign

    • Be aware of Discretionary rate relief

    • CASC benefits for clubs that pay players

    • Gift Aid

      • Top rate tax payer

      • Volunteer expenses

      • Vice Presidents/ Social members

      • Auctions

      • Legacies

      • Sponsored events


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    CASC – where to go for further information

    • www.cascinfo.co.uk

    • Download all the key forms and guidance booklets

    • Learn how to maximise Gift Aid

    • Access CASC Q & A’s

    • Keep track of news of the scheme

    • Register for regular updates

    • Talk to other clubs via online forum


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    CASC – where to go for further information

    • www.rfu.com/community

    • club management section

    • RFU sample rules for Industrial and Provident Society qualifying as CASCs

    • RFU sample Memorandum & Articles of Association for Rugby Clubs constituted as a company limited by guarantee qualifying as CASCs


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