I will try to keep these points fairly brief because we are dealing with a fairly limited point in the legislation. Let me begin by dealing with what I can of the points raised by the two Opposition Members. I shall answer them in broad terms and then move on.
First, HMRC and the Government are strongly committed to the CASC model. We think it has many benefits and of course in this Olympic year we all particularly recognise that. I am aware of issues with the Charity Commission ruling, and HMRC is going through and looking at the points that have emerged from that. It is holding discussions with stakeholders. Let me perhaps give the hon. Member for Bassetlaw one of the friendlier responses he has received in Committee and say that I would be delighted to hear from the organisations to which he refers with their views on what helps them best.
CASCs should do what they say on the tin. They need to be community. They need to be amateur. They need to be for sports. They also need to be a club. Let me deal with the point raised by the hon. Member for Kilmarnock and Loudoun about the rules for membership subscriptions. Again, these clubs are community clubs. When it comes to things like gift aid, there are restrictions on what it can be applied to. It cannot apply to something that then provides a benefit in return, and in some cases membership can be interpreted in that way, where it is most often paid for personal use of facilities. It is not necessarily appropriate to extend gift aid there. Again, on the general point that she and the hon. Member for Bassetlaw raised, various issues are being looked into around the broader points of CASCs.
Moving swiftly on, let me turn to the changes that clause 52 makes. It makes changes in two particular areas. The clause ensures that CASCs do not need to amend their constitutions to include extra conditions covering location and management in order to retain their access to the favourable tax regime that is provided under the CASC scheme. Let me now provide some background. This is what I began referring to when I told the hon. Member for Newcastle upon Tyne North that I would have to answer across clauses 51 and 52. These rules relate to a change in the Finance Act 2010 when the special tax rules for charities and CASCs were extended to qualifying organisations in Europe.
An amateur sports club is entitled to be registered as a CASC if it satisfies certain conditions. The 2010 legislation introduced two extra conditions. Firstly, the location condition requires a club to be based in the European Union, Iceland or Norway. Secondly, the management condition requires the club to be run by people who are fit and proper persons. The two new conditions were drafted in a way that requires CASCs to include those conditions in their constitutions. But this was never the intention. While we expect all registered CASCs to satisfy these conditions in practice, it does not need to be a requirement under their club constitution. There is a fairly common-sense case to be made here. If the new CASC scheme rules were operated strictly in accordance with the law, then all existing CASCs would need to amend their constitutions to include extra conditions to maintain their CASC status. Clearly that would be an unnecessary and very significant administrative burden for more than 6,000 clubs.
Since the problem came to light late last year, HMRC has continued to register CASCs on a concessionary basis. This change will put HMRC’s operational practice on to a statutory basis. It will ensure that all registered CASCs continue to qualify under the scheme, without needing to amend their constitutions. As I said on clause 51, CASCs themselves will not notice a great deal of difference as a result of this clause as they may well have been unaware of the requirement to include the new conditions in their constitutions. I am keen to make these changes now to put HMRC’s operational practice on to a statutory basis.
It is important to reiterate the Government’s support for the CASC scheme in this Olympic and Paralympic year. The CASC scheme allows generous tax reliefs to more than 6,000 qualifying sports clubs. The clause ensures that those clubs can continue to benefit from the CASC rules without incurring an unnecessary administrative burden. It makes changes in line with what was introduced in the Finance Act 2010.