English rugby wins tax advantage

The taxman is to offer a boost to Rugby’s grass roots that could help the
England rugby team win the World Cup ­ next time around.

With observers pessimistic about England’s chances in their defence of the
Cup, which begins this weekend, the Treasury has agreed to the RFU’s request for
tax breaks on funds put into grass-roots projects.

‘We wanted a total tax exemption, but the Treasury has agreed with our
position and will start to give us a tax deduction,’ the RFU’s FD Nick Eastwood

In most businesses, if profits are reinvested, the company gets tax
deductions for doing so. But grass-roots investments in rugby had not been
recognised by the taxman as relating to a reinvestment into the business in the
RFU’s case.

As the RFU’s rugby programmes total £20m, the exemption could mean millions
of pounds for the RFU, which is receiving lower revenues as a result of the
England team’s mixed fortunes.

There remains a technical hitch over EU state aid rules, Eastwood said, but
he believed the changes would be incorporated into the Finance Act in April

The Treasury said the RFU’s claim was ‘a bit speculative’. A spokesman
indicated it was ‘still in discussions with the RFU and other bodies on various
tax issues.’

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