Finance (No. 2) Act 2017

22 Grassroots sport

(1) CTA 2010 is amended as follows.

(2) In section 1(2) (overview of Act)—

(a) omit the “and” at the end of paragraph (g), and

(b) after that paragraph insert—

“(ga) relief for expenditure on grassroots sport (see Part 6A), and”.

(3) In section 99(1) (group relief: losses and other amounts which may be surrendered), after paragraph (d) insert—

“(da) amounts allowable as qualifying expenditure on grassroots sport (see Part 6A),”.

(4) In section 105(4) (group relief: order in which amounts are treated as surrendered)—

(a) after paragraph (a) insert—

“(aa) second, expenditure within section 99(1)(da),”,

(b) in paragraph (b), for “second” substitute “third”,

(c) in paragraph (c), for “third” substitute “fourth”, and

(d) in paragraph (d), for “fourth” substitute “fifth”.

(5) After Part 6 insert—

“PART 6A Relief for expenditure on grassroots sport

217A Relief for expenditure on grassroots sport

(1) A payment made by a company which is qualifying expenditure on grassroots sport (and which is not refunded) is allowed as a deduction in accordance with this section from the company’s total profits in calculating the corporation tax chargeable for the accounting period in which the payment is made.

(2) The deduction is from the company’s total profits for the accounting period after any other relief from corporation tax other than—

(a) relief under Part 6,

(b) group relief, and

(c) group relief for carried-forward losses.

(3) If the company is a qualifying sport body at the time of the payment, a deduction is allowed for the amount of the payment.

See section 217C for the meaning of “qualifying sport body”.

(4) If the company is not a qualifying sport body at the time of the payment, a deduction is allowed—

(a) if the payment is to a qualifying sport body, for the amount of the payment, and

(b) if the payment does not fall within paragraph (a) (a “direct payment”), in accordance with subsections (7) and (8).

(5) If at any time on or after 1 April 2017 the company receives income for use for charitable purposes which are purposes for facilitating participation in amateur eligible sport, a deduction is allowed only if, and in so far as, the payment exceeds an amount which is equal to the amount of that income which—

(a) the company does not have to bring into account for corporation tax purposes, and

(b) has not previously been taken into account under this subsection to disallow a deduction under this Part of all or any part of a payment.

See section 217B(3) for the meaning of terms used in this subsection.

(6) But in any case, the amount of the deduction is limited to the amount that reduces the company’s taxable total profits for the accounting period to nil.

(7) If the total of all the direct payments made by the company in the accounting period is equal to or less than the maximum deduction for direct payments, a deduction is allowed under subsection (4)(b) in respect of that total.

(8) If the total of all the direct payments made by the company in the accounting period is more than the maximum deduction for direct payments, a deduction is allowed under subsection (4)(b) in respect of so much of that total as does not exceed the maximum deduction for direct payments.

(9) The maximum deduction for direct payments is £2,500 or, if the accounting period is shorter than 12 months, a proportionately reduced amount.

(10) The Treasury may by regulations amend subsection (9) by substituting a higher amount for the amount for the time being specified there.

217B Meaning of qualifying expenditure on grassroots sport

(1) For the purposes of this Part, a payment is qualifying expenditure on grassroots sport if—

(a) it is expenditure incurred for charitable purposes which are purposes for facilitating participation in amateur eligible sport, and

(b) apart from this Part, no deduction from total profits, or in calculating any component of total profits, would be allowed in respect of the payment.

For the meaning of charitable purposes, see sections 2, 7 and 8 of the Charities Act 2011.

(2) Where expenditure is incurred for both—

(a) charitable purposes which are purposes for facilitating participation in amateur eligible sport, and

(b) other purposes,

then, for the purposes of subsection (1), it is to be apportioned between the purposes in paragraph (a) and the purposes in paragraph (b) on a just and reasonable basis.

(3) For the purposes of section 217A(5) and subsection (1)(a)—

(a) paying a person to play or take part in a sport does not facilitate participation in amateur sport, but paying coaches or officials for their services may do so, and

(b) “eligible sport” means a sport that for the time being is an eligible sport for the purposes of Chapter 9 of Part 13 (see section 661).

217C Meaning of qualifying sport body

(1) For the purposes of this Part, a “qualifying sport body” is—

(a) a recognised sport governing body;

(b) a body which is wholly owned by a recognised sport governing body.

(2) A “recognised sport governing body” is a body which is included from time to time in a list, maintained by the National Sports Councils, of governing bodies of sport recognised by them.

(3) The Treasury may by regulations—

(a) amend this section for the purpose of altering the meaning of “qualifying sport body”;

(b) designate bodies to be treated as qualifying sport bodies for the purposes of this Part.

(4) Regulations under section (3)(b) may designate a body by reference to its inclusion in a class or description of bodies.

(5) In this section “the National Sports Councils” means—

(a) the United Kingdom Sports Council,

(b) the English Sports Council,

(c) the Scottish Sports Council,

(d) the Sports Council for Wales, and

(e) the Sports Council for Northern Ireland.

(6) Regulations under subsection (3)(b) made before 1 April 2018 may include provision having effect in relation to times before the regulations are made (but not times earlier than 1 April 2017).

217D Relationship between this Part and Part 6

If, but for section 217A, an amount—

(a) would be deductible under Part 6, or

(b) would be deductible under Part 6 but for Chapter 2A of Part 6,

the amount is not deductible under this Part, and nothing in this Part affects the amount’s deductibility (or non-deductibility) under Part 6.”

(6) The amendments made by this section have effect for the purpose of allowing deductions for payments made on or after 1 April 2017.

(7) Where a company has an accounting period beginning before 1 April 2017 and ending on or after that date, the accounting period for the purposes of the new section 217A(9) is so much of the accounting period as falls on or after 1 April 2017.