If your club is preparing a capital grant application or starting to fundraise for a capital project, being aware of the additional revenue available to the club through tax relief can be a significant boost to fundraising efforts by helping to maximise the return from individual donations. Club volunteers may be put off by the paperwork involved but with a little bit of preparation and the approval of the individual donor, securing these additional funds can be fairly straightforward.
This article is intended as a rough guide to illustrate to sports clubs the income opportunity available through tax relief and does not constitute financial advice. To obtain up-to-date advice relating to tax relief on sports club donations, consult your financial advisor or tax expert.
Who can apply for tax relief on donations to sports bodies?
The tax relief is available to approved sporting bodies who have an approved capital project with the Department of Transport, Tourism and Sport. To apply for tax relief, your club will also need a Tax Clearance Certificate (obtained through ROS). and a Games & Sports Exemption Number. If your sports club has not already applied for this Revenue exemption, details on how to apply for a Games & Sports Exemption Number can be obtained from the Revenue website here.
What is an approved capital project?
An approved capital project has been formally approved and the club must have been issued a certificate and approved project number by the Department of Transport, Tourism and Sport and can be any of the following:
- Purchase of land for use by the club in providing sports or recreation facilities
- Purchase, construction or refurbishment of buildings to be used for sports/recretaion
- Purchase of permanently-based sporting equipment (i.e. not mobile personal equipment)
- Restoration/improvement of playing pitches, courts or other surfaces
- Repayment of loans related to any of the above by the club. (Loan must have been taken out for the purposes of an approved project on or after 1st May 2002)
For more, read our rough guide on applying for sports capital grants.
Who claims tax relief for these donations?
The tax relief is claimed by the sporting body (most likely your club). When a person makes a donation, the effect of the tax relief means that the amount of tax that person has paid on that income is added to their net donation, meaning more money for your club. For example, if a person makes a donation of €500 in a year, the tax they have paid on that €500 will be added to their donation in the form of tax relief from Revenue. This ‘grossed up amount’ will be €625 (if they pay tax at the standard rate of 20%) or €833.33 (if they pay tax at the higher rate of 40%) provided the donor has paid more than that amount in tax in the relevant year. As you can see from this example, this tax relief scheme may take a little bit of work but can have a huge impact on fundraising for capital projects.
What is involved for the donor?
Donations under this tax relief scheme must be for at least €250 in the tax year and must be for the sole purposes of the approved project. The payment must be made by an individual paying tax through the PAYE system. There are restrictions based on the amount of tax the individual has paid and how they are assessed by revenue for tax purposes and there’s more information on that here on the revenue.ie website. The individual donor must meet those requirements for tax assessment and must supply the club with a completed copy of this tax relief for donations form.
The donor must also have a record of the donation in the form of a receipt from your club.
Are there any other restrictions or obligations on the club?
These schemes are subject to review by Revenue each year. The scheme is currently limited to donations over €250 received after May 2002 on approved projects. To qualify as an approved sports body a club must also keep records as laid out here on Revenue.ie and provide the Department of Transport, Tourism & Sport with a progress report each year detailing works done, timetable for completion and a list of relevant donors.
More details on the tax relief on donations to sports clubs can be found here on the revenue.ie website.
How to complete an application for tax relief for on donations to sports bodies?
If your club is an approved sporting body with an approved capital project, then the next step is to submit the claim to the Charities & Sports Exemption Unit of Revenue through the Revenue Online Service (ROS). In order to do this, your club will need to be registered with Revenue. Your club may already have an online account with ROS – check with your club secretary or club chairman for details.
You will be required to submit a completed Form 847A for each of the eligible donations received.
Need help raising funds for your next sports capital project? Contact your Clubforce account manager today or fill in your details on the form below and a member of our team will be in touch.