Introduction to CASC
That’s the scheme intended to give dear little cricket and tennis clubs and other little, tiny sports clubs relief for business rates and some concessions on tax. It has been going since 2002 and was dreamt up by Andrew Phillips, who was the Legal Eagle on the Jimmy Young Show. Andrew now sits as a Liberal Democrat peer and we have corresponded with him. The scheme he originally devised was good and it came about through the North Tawton Rugby Club case. The Rugby club wanted charitable status. The court said “No”.
Andrew and others devised a scheme to be a halfway house towards charitable status – the CASC scheme.
It was supposed to be for small village clubs, particularly where they were clobbered for business rates, but had limited opening times and earnings. The initial debates proposed a limit of a rateable value of £8,000. Needless to say, golf protested, “What about us? We pay more than that in rates!”
As with so many things the Government gets hold of, it went off in their hands! We assume Lord Andrew Phillips of Sudbury is appalled. With no limit on business rates there are wealthy golf clubs getting an 80% subsidy on business rates.
This gives Langley Park GC in Kent a subsidy of £56,898 and Ealing a subsidy of £50,114. Nice one!
We protested. The Government has made things worse. AGCO has taken our complaint to Europe
The rules are pretty specific and it is operated by the HMRC charities’ department in conjunction with the Charity Commission. Clubs are supposed to be open for all members, affordable, be non-discriminatory, not be open to the public to trade, they should only serve food and drink as an add-on to sporting activities, keep all income from visitors entirely separate from members, and basically operate as dear little clubs. In exchange they get a mandatory 80% rate relief and concessions over corporation tax.
So what happens in golf? The golf clubs operating this scheme/scam save themselves up to £50,000 a year in business rates. They cheat the system by opening to the public, with weddings and conference, by failing to keep funds from visitors separate, and they then try to get round the membership rules by giving memberships for as low as £1. “I’m a country member” comes to mind.
Anyway, after much protesting from us, the Charity Commission and HMRC launched a review of CASC and had a consultation ending on August 12th 2013.
AGCO put in two reports – one from Richard Haygarth FCA, who owns the Chichester Golf Centre, dealing with the specific questions, and the other from Vivien Saunders, our legal beagle, on information gleaned from many AGCO members.
England Golf lodged another. They kindly referred to the system causing distortion between member clubs and proprietary clubs which has given us ammunition to Europe.
Then the UKGCOA put in a report which suggested all the subsidies just went to England Golf. You pays your money and you take your choice.
- AGCO CASC submission RH
- AGCO CASC submission VS
- England Golf CASC Consultantion Responses 1 August 2013
- UKGCOA CASC Consultation
AGCO Report RH – AGCO Report VS – England Golf re CASC and a letter – UKGCOA re CASC
CASC rules abused
To be CASC registered you have to be a non-profit making club. That’s meaningless in golf. George Osborne uses Sunningdale Golf Club as his idea of a non-profit making club! So it is meaningless. Sunningdale, with its £1.3 million of green fees isn’t, of course, CASC registered but Royal Dornoch with about £650,000 of green fees is. So, non-profit making is a red herring.
Clubs must be non-discriminatory. That seems meaningless. Notts Golf Club (Hollinwell) which is renowned as the most discriminatory golf club in the country against women managed to get a spurious CASC registration and saved over £90,000 in business rates before being rumbled. They seem to have pocketed the savings!
Food and catering is only supposed to be an add-on to playing sport and not freely open to the public. Despite this, over 80 of the CASC registered golf clubs have massive wedding businesses. Here’s a table of 80 of them. And remember, they are trading unfairly against you, against local pubs, hotels and other bona fide businesses paying their rates and taxes.
And then there are also at least five jammy dodgers in the CASC system with hotel accommodation on site – three in Wales, one in Scotland and one in England. And no doubt we have missed some.
Here’s a table of some of the main beneficiaries on the business rates!
|Club||Postcode||Rateable Value||Rates 2013 @ .471||Subsidy @80%|
|Langley Park||BR3 6SZ||151,000||71,121||56,898|
|Addington Palace||CR10 5BB||127,000||59,817||47,854|
|Pinner Hill||HA5 3YA||127,000||59,817||47,854|
|North Middlesex||N20 0NL||116,000||54,636||43,708|
|Potters Bar||EN6 1DE||113,768||53,585||42,868|
|Mill Hill||NW7 3AL||103,000||48,513||38,810|
|Brampton Park||PE28 4NF||101,000||47,571||38,057|
|Bedford and County||MK41 6ET||101,000||47,571||38,057|
|Saffron Walden||CB10 1BX||90,500||42,626||37,301|
|Harpenden Common||AL5 1BL||85,000||40,035||32,028|
|Keddleston Park||DE22 5JD||79,000||37,209||29,767|
|St. Neots||PE19 7GE||78,000||36,738||29,390|
|North Manchester||M24 4PE||76,000||35,796||28,637|
|East Devon||EX9 6DG||72,000||33,912||27,130|
|Scarborough North Shore||YO12 6PP||71,000||33,441||26,752|
|East Brighton||BN2 5RA||63,000||29,673||23,738|
|Aberdovey, Wales (@46.4%)||LL35 0RT||59,500||27,608||22,086|
And we have made a full complaint of all the abuse to the CASC team at HMRC in Bootle. Hopefully they will have the guts and manpower to claw back wrongly claimed subsidies. You can enjoy that report!
Please click here to read or download: AGCO Report to HMRC Peter McConnell
The CASC Consultation – new rules
The CASC consultation had more answers from golf than any other sport. Surprise, surprise. Following the consultation the Government pronounced that they wanted to do even more for sport and they have widened the options for CASC clubs. Instead of clamping down on the big clubs benefiting they have made things potentially worse.
Linked companies The real gem is that the rules now give CASC clubs corporation tax relief on trading of £100,000. But in order to ensure they can keep under this limit the new rules, once eased through the IMPs in Parliament, will encourage CASCs to have subsidiary companies to do the trading. These subsidiary companies could handle the catering, the hotel bit, weddings and conferences and keep themselves under the VAT threshold if necessary. Then they will be able to pop the profits from these subsidiary trading companies back into the CASC club, tax free as a form of Gift Aid.
Disaster? No it’s marvellous. Because just remember that HMRC won’t let a proprietary golf club have a subsidiary members’ club with VAT exempt membership fees. We can’t have linked companies. Now HMRC and the Government are positively suggesting CASC clubs do this. Whoops!
Read the proposed new rules.
Will – those reports are there. There is a large one with HMRC plastered on it. And an abbreviated one. NOTE: Viv please can you confirm the file names, I’m not clear which ones you want here – thanks!
AGCO’s CASC Case to Europe
We aren’t putting up with this without a fight. While the politicians openly say “non-profit making clubs, like charities, deserve public support” and then classify Royal Lytham and Sunningdale as non-profit making what chance have we here?
So we are taking the fight to Europe. The European Commission doesn’t allow State Aid. Basically forbidden State Aid includes subsidies which distort the market. Subsidies aren’t allowed where they give one part of an industry an advantage over another. They aren’t allowed if the subsidised party carries out economic activity in competition with others. The State Aid is only unlawful if it produces distortion from one Member State to another. Funnily enough CASC can apply to a club not based in the UK. So that helps! We have shown that CASC allows golf clubs in the UK to trade unfairly with golf clubs in Europe. Thanks to the Sports Marketing Survey Report we can compare costs of golf in the UK and Europe. They have given useful figures on tourism in golf for the UK and Europe. Hoorah!
The other criteria for any subsidies that are allowed, is that they would have to be available across the whole of the UK. It seems the Government has fallen foul of that one and hopefully tripped over at the first hurdle. CASC isn’t available in Northern Ireland.
Almost as soon as the new proposed CASC rules were announced in late November, AGCO were on the case.
On December 17th 2013 we filed our complaint to Europe, asking for the CASC scheme to be withdrawn. It seems that if there has been unlawful State Aid the offending Member States have to claw it back. And there are even provisions for damages for those harmed by competing against those benefitting from illegal State Aid. But let’s not hold our breath. Getting rid of CASC would be a real bonus.
Here is our case to Europe
Form for the submission of complaints concerning alleged unlawful State aid – through Community Amateur Sports Club Scheme
Please click here to read and download the document: AGCO State aid CASC Complaint
A typical case of CASC distortion – Hertfordshire
One club in Hertfordshire has effectively lost most of their green fee and society income to CASC registered clubs which are able to have lower membership and green fees due to CASC registration. All of the clubs with which the club competes are open for business to the general public and compete unfairly for memberships, catering, weddings. All of the clubs listed take in excess of the corporation tax threshold in CASC and don’t pay tax. We specifically refer HMRC to the website of Hillier Hopkins, accountants in Hertfordshire, who positively brag at their skill in ensuring that their clients don’t pay corporation tax. http://www.hillierhopkins.co.uk/specialist-sectors/golf-clubs
Ealing Golf Club www.ealinggolfclub.com
A saving in business rates of £50,114; that’s probably equivalent to £100 a member. It is a CASC club very much open to the public. The club advertises for weddings and conferences with its facilities for up to 170 people and its promise of a great venue for a London wedding.
Enfield Golf Club www.enfieldgolfclub.co.uk
This CASC registered club saves £41,071 in business rates. The club has a Marketing and Events Manager and substantial wedding and conference business. The club advertises on its website that it holds: Wedding receptions, Dinner and Dances, Birthday and Christmas Parties, Anniversary Celebrations, Funeral Receptions, Christenings, Tribute Nights, Business Meetings, Training Days and Dinners, Breakfast Meetings. This club takes considerably over the corporation tax threshold for CASC.
Another substantial CASC registered club with a busy commercial business.
Knebworth Golf Club www.knebworthgolfclub.com
This CASC registered club gets rate relief of £38,434, giving a saving of some £80 per member. It is a substantial members’ club with a trade in green fees and societies.
Mill Hill Golf Club www.millhillgc.co.uk
This very substantial CASC club gets business rate relief of £38,810. The club is very much open to the public and houses a Jazz club every Wednesday night!
This club gets rate relief of £43,708, saving each member in the region of £100. The club advertises the splendour of its clubhouse and its wedding, conference and function trade, stressing its position just 5 miles from London’s West End.
Old Fold Manor www.oldfoldmanor.co.uk
This CASC registered club states that they have a “proud reputation for hosting weddings, parties, seminars, and conferences at a price that is tailor-made for every customer and that Old Fold Manor is ideal for Corporate Golf events and Golf Societies of all sizes.” This club is a client of Hillier Hopkins. This club takes considerably over the corporation tax threshold for CASC.
Pinner Hill Golf Club www.pinnerhillgc.co.uk
This CASC registered club has business rate relief of £47,854. This subsidy is the equivalent of £131 per head reduction in subs for the club’s 365 full members. The club has corporate membership packages up to £2,830 plus VAT which gives the company non-shareholding memberships and certain discounts for functions etc. The club is a limited company with shares and an unequal shareholding. We query the status of the corporate members in CASC. CASC registered since March 2004 and with business rate subsidy over that period of an estimated £350,000.
Potters Bar Golf Club www.pottersbargolfclub.com
This CASC registered club has business rate relief of £42,868. They advertise for all sorts of outside events : “Potters Bar Golf Club is available for hire, we can cater our venue to suit a variety of functions including weddings, anniversaries, and birthdays and can accommodate nearly any request”.
Verulam Golf Club www.verulamgolf.co.uk
This CASC registered club has business rate relief of £39,564. This club advertises a very substantial business for weddings, conferences and all manner of functions. They advertise to cater for 120 for a silver service dinner up to 200 for a buffet.
It is our case that not one of these CASC registered golf clubs keeps the income from members and non-members separate and in particular all the clubs mix the bar and catering revenue from members and non-members. They also mix the green fees from members’ guests (paid by members) and visitors. It is our case that every one of these CASC registered clubs is breaking the CASC regulations, with trading which falls outside the “social adjunct” rules and income from non- members in excess of the CASC corporation tax limit.
The competition from these CASC registered clubs, with their business rate relief and failing to declare their taxable income, has effectively destroyed the business of one long standing and previously very successful proprietary club in Hertfordshire. This exercise can be repeated for most proprietary clubs in England, Scotland and Wales.
CASC and 2014
HMRC is holding a meeting with all the governing bodies of sport in the charities/CASC department in early January 2014 and England Golf is attending. They can then learn about the proposed new rules. By then the CASC department should have a copy of our complaint to Europe to stop CASC in its tracks.
It is a shame if golf has ruined it for other sports. But frankly why should the Government promote the idea of Rugby clubs, tennis clubs and any other sports clubs operating a bar and catering trade to compete against local pubs and other bona fide businesses. So maybe the whole of CASC should go for licensed premises!