Grassroots sports – what are they, and what tax reliefs are available for contributions?

‘Grassroots sport is physical leisure activity, organised and non-organised, practised regularly at non-professional level for health, educational or social purposes’ (Source: European Commission)

Companies are being encouraged to donate to these sporting activities, via the 2017 Finance Bill. Any measure like this that helps to increase participation in sport and exercise has to be welcomed.

The Bill specifically offered firms a new form of tax relief. They can deduct any donations they make to grassroots sports from their total annual profits. This relief applies only to profits made from the starting date of April 1st, 2017.

There has previously been relief on donations to registered charities. There is no change in those cases. The change now is that certain classes of non-charity grassroots recipients can qualify for tax-deductible payments.

The new relief applies in these three cases:

  1. A firm donates direct to grassroots sports, without any sport organisation being involved: qualifying donations can only be made up to £2,500 p.a. in such cases
  2. A firm pays to National Sports Council–recognised governing sport bodies, or certain other qualifying sport bodies
  3. Qualifying sport bodies make payments to grassroots sports

You claim for the relief in the same accounting year that you make the payment, regardless of whether you have accrued it previously.

You cannot generally get relief for payments made to individual participants, but you can pay officials and coaches.
‘Reasonable’ out-of-pocket expenses, however, can be reimbursed to the players and then claimed.

If you want to get involved in local sport through your company, this may encourage you – and we at Odiri Tax Consultants will be happy to advise you on adding this to your overall tax relief portfolio.

Loveth Watson

Loveth is a qualified accountant and tax consultant with over 20 years experience. She started her career with top 5 accountancy practice and held the position of tax manager prior to starting her own practice. Loveth is a member of the Institute of Financial Accountants, Institute of Public Accountants and the Association of Taxation Technicians. Loveth’s background in accounting, corporate and personal tax enable her to advise shareholders on the personal tax implications of corporate structuring and transactions, ensuring a holistic approach to tax planning is provided. Loveth advises clients in the areas of accounting, tax and business development. Her main focus is in delivering services to owner-managed businesses and seeking structured solutions to the challenges that they face.