03 Feb Did You Know… Non-Member Income is Taxable?
The income generated by a not for profit sports club from its own members is not taxable. This is known as “mutual trading”, as in effect the members are trading with themselves.
It should therefore be noted that non-member income is taxable income. Non-member income is defined as income generated from non-members of the club (through competitions, social events, sponsorship etc.) Please note that, for tax purposes, a non-member is someone who does not have the right to vote at the club’s AGM and is not a junior member of the club.
It should be noted that a club that is registered as a Community Amateur Sports Club (CASC) or as a charity, does not have to pay tax on any profit made from its non-member income is said income income does not exceed £50,000 in a tax year. If the total non-member income exceeds £50,000, all the income is taxable.
A club should ensure that it keeps accurate records of whether income is from members or non-members and should pay any tax due on the profit/surplus made from the non-member income.