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

2. 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

3. 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

4. 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

5. 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”

6. 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

7. 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.

8. 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

9. 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

10. 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

11. 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

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

13. 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”

14. 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”

15. 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

16. 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

17. 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

18. 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

19. 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

20. 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

21. 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

22. 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

23. 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

24. 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

25. 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