Contributions to grassroots sport

By Tolley
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The following Corporation Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Contributions to grassroots sport
  • Introduction to the relief
  • Definitions
  • Mechanics of the relief
  • Anti-abuse provisions

Introduction to the relief

A payment made by a company which is qualifying expenditure on grassroots sport is allowed as a corporation tax deduction, subject to certain conditions. This legislation was introduced by F(No 2)A 2017, s 22 and applies to payments made on or after 1 April 2017. Without this specific legislation, a deduction would not otherwise be available on the basis that such a payment would not usually be made wholly and exclusively for the purposes of the trade.

CTA 2010, s 217A(1)

The relief is given by way of a deduction from taxable total profits. It is not possible to create a loss by utilising this relief so spreadsheets used in tax calculations must be appropriately formulated to ensure total profits cannot be reduced below zero.

CTA 2010, s 217A(6)

Full relief is given for qualifying payments made by or to a qualifying sports body (QSB). The QSB test for company donors is applied at the time of payment. Relief for ‘direct payments’ (ie non-QSB payments) is restricted to a maximum of £2,500 which is reduced proportionately for short accounting periods. Where an accounting period straddles 1 April 2017, then a notional accounting period for the purposes of the maximum relief begins on 1 April 2017.

CTA 2010, s 217A(3), (4), (7)–(9)
Definitions

There are several definitions that apply for the purposes of relief for expenditure on grassroots sport as set out in the table below:

Term

More on Trading company computations: