CASCs – What Are They?
Of all the areas where clubs lose out on potential cashflows, Community Amateur Sports Club – or CASC – status is probably the most common missed opportunity.
For those that don’t know what CASC status is, essentially it means your club is now considered a charity. A new corporation is formed aligning to CASC standards, and then your club’s existing assets are transferred to it.
A CASC exists to provide means-tested sport access to the community. There are certain limitations as a result – the CASC cannot be run for profit, nor can it charge over £31 per week for membership. Companies also lose the ability to sell their assets.
Why should you seek CASC Status?
The primary reason that clubs should think about becoming a CASC is that being a CASC allows clubs to access huge tax breaks. In particular, CASCs can claim up to 80% relief on business rates, which can make a very significant impact in terms of money coming in. CASCs are also largely free from income taxes on renting, capital gains taxes, and income taxes from membership fees and food and drink sales.
Some golf clubs have saved £20’000 a year through various CASC savings. Here at Mango Golf, our history of experience in club management leads us to believe it’s one of the most decisive changes a golf club can make.
Since CASCs cannot be converted back into regular companies, members may be reluctant to undergo this process. There are three potential disadvantages. Some clubs fear that full pay members may be crowded out by subsidized members, affecting revenue. The requirement that all members be allowed to vote on club matters can also seem intimidating. There is also the issue of no longer being able to sell assets if necessary.
However, clubs should not be overly concerned with either. Subsidized memberships tend to be fairly rare. Simply put, if there was enough demand for memberships that clubs would be threatened with a flood of means-tested newcomers, the industry probably wouldn’t be in such a difficult spot as it has been in the previous few years.
As for membership voting, if your club doesn’t already allow members to vote, this is more likely to be a benefit than anything. Some individual members might struggle to see the big picture of your club’s operations. However, voting allows your club to be able to respond to the needs of the members. Keeping members happy is vital for member retention.
Finally, when it comes to selling assets, that is not a sustainable practice to maintain revenues over long periods. If a club is selling assets usually that’s because it’s getting into financial difficulties. CASC status can help a club from getting into financial difficulties in the first place.
At Mango Golf, we don’t believe that clubs have to potter into a managed decline. Rather, we believe that clubs can be vibrant and successful. CASC status can be one of the tools to make them that way. If you’re interested in having a chat with our team about pursuing CASC status or anything else, feel free to book a free 30 minute consultation.