CTM09515 - Corporation Tax: relief for expenditure on grassroots sport - CTA10/PART6A: qualifying expenditure
Source: gov.uk (2025-07-18)


In order for a payment to grassroots sports to be eligible for the Corporation Tax (CT) deduction, the following conditions must be met:
- The expenditure must be incurred for charitable purposes, and must therefore meet the necessary conditions relating to the normal meaning of ‘charitable’ (see below for references to the Charities Act, and CTA10/S217B (1));
The expenditure must be incurred for the purpose of facilitating participation in amateur sport, which must be an ‘eligible sport’. This takes the definition in the existing Community Amateur Sports Club (CASC) rules in CTA10/PART13/CHAPTER9 (CTA10/S217B (3)(b)).

‘Facilitating participation’ can take a fairly broad meaning. It includes (but is not limited to) grants, payments to hire facilities, payments to coaches and officials for their services, costs of training coaches and officials, and reasonable out of pocket expenses paid to participants, such as the cost of travelling to competitions and events. It also includes expenditure on items required to play the sport, for example, equipment, facilities and team kit, even though they may be capital in nature. Payments designed to facilitate participation in sport through the use of marketing, communications and information technology may also be covered;

Any payments to players for playing (as opposed to reasonable out of pocket expenses) will not meet the requirement for the expenditure to be charitable in nature and will not relate to ‘amateur’ sport (CTA10/S217B (3)(a));

Any payment involving more than incidental personal benefit will not meet the criteria for the deduction as it would not be charitable in nature (see below in relation to the ‘public benefit’ requirement);

The activity being supported must be open to a broad enough section of the public, although this will be interpreted reasonably. For example, a local coaching session aimed at a certain age group can be limited to that age group, and does not need to be opened up to all age groups;

It is likely that much grassroots sport activity will be delivered through a local club or organisation. All the circumstances will need to be considered. If the activity the club delivers is generally accessible to all, that activity may be regarded as satisfying the ‘public benefit’ test;

There must be no other CT deductions available for the payment. This means that the deduction will not be available if the payment already qualifies as a donation to a charitable body or to a CASC, or the payment is otherwise deductible as an expense of a trade (for example, as sponsorship, CTM09510 (https://www.gov.uk/hmrc-internal-manuals/company-taxation-manual/ctm09501)) – CTA10/S217B (1)(b);

The payment must not be refunded (CTA10/S217A (1)(a)). This could arise where, for example, a company has made a donation for a specific project, but the full amount was not spent and the balance returned to the donor company, or a company made a payment to allow a project to move forward on the understanding that some or all of it would be repaid out of other grants or fundraising.

If expenditure is incurred for both charitable and non-charitable purposes, for example, where costs are incurred to manage both grassroots sports events and elite events, the expenditure should be apportioned on a just and reasonable basis to establish the amount that can be treated as qualifying expenditure and therefore be eligible for the deduction – CTA10/S217B (2).

Officers will interpret the ‘public benefit’ rule in the light of all the circumstances. For example, if the owner of a local company makes payments to support junior coaching, and one or more of the players who benefit among a larger group are relations, this would be considered an incidental personal benefit and the deduction would be allowable provided the activity is genuinely open to a wide section of the public in the relevant age group.

The meaning of ‘charitable purposes’ is taken from sections 2, 7 and 8 Charities Act 2011. Section 2 introduces the general concept, and specifies that the purpose must be ‘for the public benefit’. The general definition is expanded in more detail in section 3. In particular, section 3(1)(g) identifies ‘the advancement of amateur sport’. Section 4 refers to the general law of England and Wales with regard to the term ‘public benefit’, which conveys the requirement that the supported activity must provide a benefit (the benefit aspect) and that the benefit is available to the public in general or to a relevant section of the public (the public aspect).

Sections 7 and 8 Charities Act 2011 apply the law to Scotland and Northern Ireland.