Government has continued to provide much needed financial support to grassroots sports clubs and organisations during successive lockdowns and restrictions due to the coronavirus pandemic.
This includes grants made under the Small Business Grant Fund, the Retail, Hospitality and Leisure Grant Fund, Restart Grants and Local Authority Discretionary Grants (and equivalent schemes in Scotland, Wales and Northern Ireland).
Legislation was introduced last year in the Finance Act 2020 to tax these business support grants. Following this, HMRC published its detailed guidance on these new tax rules. The guidance is quite general in scope and in particular does not address the special corporation tax rules which apply to members sports clubs.
HMRC’s overall position is that these grants are fully taxable whether or not a club has been liable to corporation tax in the past and filed returns. The only possible exceptions are:
Where the grant is taxable, deductions will be available for deductible expenditure which may reduce the taxable amount of the grant. The position is however not straightforward.
Following HMRC’s guidance, those clubs which have had no taxable income and have not needed to file corporation tax returns in the past are now likely to be required to do so if they have received any coronavirus support grants. Tax returns are likely to be required for more than one financial year given that grants may have been received in multiple accounting years (2019/20,2020/21 and 2021/22).
All grassroots sports clubs in receipt of coronavirus support grants (or indeed other grants such as from Sport England or the Summer and Winter Survival Package which may have a tax impact) should review their corporation tax position now and seek further professional advice where necessary.
UK sports bodies invested a record £197.9m of broadcast revenues over the last year to grow their sport and support grassroots delivery.
Read more
To mark the Alliance’s 90th anniversary, we are launching the Community Sport and Recreation Awards: Youth Edition 2025, which will celebrate the next generation of young leaders from across the sector.
Read more
As 2024 concludes and as we look ahead to 2025, the Alliance has published a message to members and partners.
Read more
Joining the Sport and Recreation Alliance is pretty simple, but worthwhile!
Register now
