CASCS the debate continues


Glenn........I have been reading with interest your blog on Community Amateur Sports Clubs (CASC) which is particularly relevant at the moment as the Members of St Mawes Sailing Club have been asked to vote YES or NO on the rule changes needed to change our sailing club from a Members Club to a Limited Liability company and to make the Club a CASC.
Transferring the Club’s assets to a Limited Liability Co gives rise to Capital Gains, Stamp Duty and Land Tax liability which we have been professionally advised can be avoided by becoming a CASC
Becoming a CASC has some advantages but also some responsibilities - I totally agree with your summary of advantages - 80% Rate Relief, Gift Aid, Access to certain Grants and some Tax advantages. However, I feel that I should comment on the obligations that you mention, which are not totally correct and which need further clarification.
Taking your points in order :-
1)   A Club becoming a CASC still has total control over its assets, can buy and sell as before and sell and move to a new building if it wishes without HMRC interference. It is only when a club is wound up that it has to transfer all its assets to the sports governing body or to another CASC or charity.
2)   A CASC must permit membership to all without discrimination.    But, if the Club had good reason to refuse membership, it could do so, as long as there was no discrimination. Naturally the Club would have to justify its reason if required.
3)    Membership fees must not be set at such a high level to discriminate on financial grounds.
The background to the issue of St Mawes Sailing Club becoming a Limited Liability Co was raised over one year ago, since when the committee has been gathering information and seeking professional advice from accountants and solicitors and also HMRC
As a Members Club, under law, any or all members can be sued for damages for an event that is not covered by the Club’s insurance, even if the Members are not directly involved in the incident. While the chances of this happening   are small, it would be financially catastrophic for any Members affected. 
Last year’s dreadful M5 multi vehicle collision which may have been linked to smoke from fireworks at the adjacent Taunton Rugby Club, brings the potential dangers into sharp focus. The blame and personal injury claims will eventually settle somewhere – hopefully on an Insurance Co.                        If insurance is inadequate or if the small print on the policy allows a get out clause for the Insurance Co, then claimants will have to look elsewhere for financial redress.
As a Limited Liability Co a Member’s liability would be a nominal sum, eg £1.00
It is a reflection on our litigious society that an increasing number of clubs are being forced to consider changing their status to protect their Members and also shame on HMRC for their confusing and complex rules that requires a sports club to spend much time attempting to understand them and also requires money to be spent on professional advice or risk an error that could hit the club with a tax bill large enough to shut them down.
Finally, I hope that the majority of the Clubs members take the trouble to vote either YES or NO to give a clear result on the future that they would like the Club to take.      Mike   

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