Ever since the London 2012 Olympics, the Government has been keen to encourage greater uptake of sports at grassroots level, and to create a lasting legacy from the Games. Its latest initiative will see small sports clubs be allowed to keep a greater proportion of their revenue before having to pay corporation tax.
The Government estimates that as many as 40,000 sports clubs across the UK could benefit from the tax breaks. The amount that a club can earn in income before paying tax will increase from £30,000 to £50,000, while the tax allowance for rental income and venue hire is set to increase from £20,000 to £30,000. Additional deductions for expenses will also be possible, such as those for key players.
The tax breaks will be applicable to any amateur sports clubs that charge between £10 and £31 in membership fees.
A time of growth for the sports equipment industry?
In addition to aiding the growth of these sports clubs, the changes could also have a positive knock-on effect for the sports equipment industry. Larger tax allowances will inevitably mean that clubs have larger budgets to spend on vital equipment such as cricket gear, and in addition to spending more on better quality equipment, they may also replenish and replace it more often.
The tax breaks, and other initiatives created by the Government to sustain the Olympic legacy, may furthermore lead to the growth of new clubs, and of course this too should drive sports equipments sales upwards.
However some people have pointed out that whilst these latest tax breaks will undoubtedly help mid-sized clubs with reasonable turnovers, they will do little to help small volunteer-run sports clubs to thrive. Could the sports equipment industry perhaps take the lead to help the growth of these smaller clubs by offering special discounts and deals for clubs below a certain turnover threshold?