What the summer budget means for sport and recreation

Today the Chancellor George Osborne set out the first Conservative-only budget since 1996. While many of the proposals – notably reductions in welfare spending and further investment in infrastructure – were widely trailed beforehand, the Budget nonetheless contains a number of striking announcements including:

•tSignificant cuts to tax credits and benefits to larger families with more than two children;
•tThe introduction of a National Living Wage rising to £9 per hour by 2020
•tAn increase in the Inheritance Tax threshold to £1m to be phased in
•tAn increase in the personal tax allowance to £11,000 from April 2016 plus an increase in the 40p rate tax threshold
•tA cut in Corporation Tax to 18% by 2020 and
•tPublic sector pay rises to be capped at 1% for four years and
•tReductions in the household benefits cap to £23,000 in London and £20,000 outside London.

As with most budgets, finding the sport-specific elements requires a bit of searching but two proposals in particular are worth noting.

First, the Government is consulting on proposed legislation to amend the tax treatment of income from sporting testimonials. The changes proposed will affect sportspersons who may be awarded a sporting testimonial or benefit after 6 April 2016. Given the potential impact, the Sport and Recreation Alliance will be scrutinising the consultation document closely and consulting with member organisations where appropriate.

Second, the Government has announced it will exempt from income tax non-resident athletes competing in the upcoming Anniversary Games in London from 24-26 July. This could result in UK fans being able to see top starts like Usain Bolt compete against other world-class talent. While a welcome short-term development, establishing a coherent and effective policy on the tax treatment of athletes and major sporting events is one of the key asks included in our Ministers' To-Do List and this is an issue we will continue to monitor on behalf of our members.

Third, the Government has reaffirmed its commitment to introducing a Horserace Betting Right and indicated that a finalised set of proposals will be ready by the end of the year. Again, given our work in the sports betting arena, we will be following developments with keen interest.

More broadly the Budget confirms that fiscal discipline and deficit reduction continue to be the Government’s key priorities. As identified in our recent Fit for the Future report, the likely spending reductions required will have a significant impact on sport in the coming years and the forthcoming sports strategy announced by the Minister for Sport is likely to provide a clearer indication of how these reductions might play out on the ground.

Outside of public funding for sport, the combination of reductions in benefits and caps on public sector pay increases will also impact on household incomes and could, by extension, affect participation in sport and recreation. This dampening effect is an issue I’ve blogged about recently and one which will, I think, continue to be felt.

Other Budget proposals that could impact on sport and recreation include a plan to allow locally elected officials to extend Sunday trading hours. With many people participating in sport and recreation at weekends, the potential extension of retail opening hours (and in turn working hours) could create a more challenging and competitive environment for sport and recreation providers.

Similarly, the Budget contains further proposals to devolve powers to city regions, including additional powers to be devolved to Greater Manchester and further plans for fresh devolution to Sheffield, Liverpool and West Yorkshire. While the detail of the powers to be reallocated has yet to be worked through, the changes could have a significant on sport and recreation, particularly if they include the devolution of enabling powers over such things as planning, transport and infrastructure.

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