Corporation Tax Act 2010 section 217A

Relief for expenditure on grassroots sport

Section 217A allows companies to deduct qualifying expenditure on grassroots sport from their total profits when calculating corporation tax, subject to certain conditions depending on whether the company is a qualifying sport body and how the payment is directed.

• Qualifying expenditure on grassroots sport that has not been refunded can be deducted from a company's total profits in the accounting period the payment is made, after most other reliefs have been applied but before charitable donations relief, group relief, and group relief for carried-forward losses.
• A qualifying sport body can deduct the full amount of its grassroots sport payments with no cap, and a non-qualifying sport body can also deduct the full amount provided the payment is made to a qualifying sport body.
• Where a company that is not a qualifying sport body makes a direct payment to grassroots sport (rather than through a qualifying sport body), the deduction is capped at £2,500 per year (reduced proportionately for accounting periods shorter than 12 months), and the Treasury may increase this threshold by regulation.
• The deduction cannot reduce the company's taxable total profits below nil, and no deduction is available to the extent the payment is funded from income received for grassroots sport charitable purposes that is itself exempt from corporation tax.