Tax breaks for sports clubs

Amateur sports clubs are to be given charitable status under new proposals to be announced in the spring Budget.

Following months of negotiations, the status of community sporting clubs is to change, making them eligible for tax breaks worth between £40m and £60m. Up to 150,000 clubs, which have an estimated total membership of 1.5 million sports enthusiasts, stand to gain from the changes. Many of them currently struggle to survive as profit-making businesses.

Winning charitable status would mean sports clubs would get 80 per cent mandatory rate relief, with a further 20 per cent available at the discretion of the local authority. Other tax breaks may also be in the offing. But despite widespread support in Parliament for amateur sports clubs to be eligible for charitable status, the complications and strict rules governing charities had caused concerns among the clubs themselves.

Many felt the conditions proposed by the Charity Commission would be "unworkable".

In discussions last week, the Sports Minister, Richard Caborn, is understood to have brokered a deal with representatives from the worlds of football, cricket and rugby, as well as the new chief charity commissioner, John Stoker, to overcome some of these issues.

One stumbling block, which has now been removed, was the Charity Commission's insistence that in order to quality for charitable status, clubs would have to ensure that "all who wish to play should be given the same opportunity to do so". The club would be "bound to maximise participation, and hence enthusiasm would count for as much as ability in selecting players".

It is understood that this condition has been watered down so that clubs would have to allow anyone who wished to join the club to be a member but the restrictions would not apply when selecting teams.

Gordon Brown, the Chancellor, is also under pressure to bring in tax changes to cover money made from social membership and bar takings.