Investing in the next generation: An overview of the new UK corporation tax relief for grassroots sport

The Finance (No. 2) Act 2017 introduced for the first time a new statutory tax relief for corporate contributions to grassroots sport in the UK.1

This article provides an overview of the new legislation and its impact on both the sports sector and wider corporate donors. The article also considers a number of potential future reforms to the relief which could further boost investment in grassroots sport through the tax system.

Specifically, it looks at:

• Background: What is the significance of the relief and how has it come about?

• The legislation: How does the relief work?

  • Section 217A – Relief for grassroots sport

  • Section 217B – Meaning of qualifying expenditure on grassroots sport

  • Section 217C – Meaning of qualifying sports body

  • Section 217D – Relationship with Part 6 Corporation Tax Act 2010

• HMRC guidance on the legislation

• Analysis: What does it mean for the sports sector and beyond?

  • Impact on NGBs

  • Impact on grass roots clubs

  • Impact on corporate donors

• Possible future reform

  • Amend the definition of a "qualifying sports body"

  • Extend relief to allow for smoothing of grassroots expenditure over time

  • Raise the cap on direct payments

  • Enhanced tax relief for grassroots spending

• Conclusion