Accounting for Clubs, Associations and Community Groups in the UK

Clubs and community organisations often handle money in more ways than a business of the same size: members pay subscriptions, the bar takes cash and cards, rooms are hired out, events raise funds and grants arrive with conditions attached. Most are run by volunteers who change every few years. Good records, simple controls and accounts the committee can follow make all of that far easier to manage.

Who this guide is for

• Working men’s clubs and social clubs with a bar and function room
• Sports clubs, from grassroots football and cricket to golf, bowls and rugby clubs
• Members’ clubs run by an elected committee
• Voluntary associations, societies and residents’ groups
• Community groups running a hall, centre or regular activities
• Treasurers, secretaries and committee members responsible for the finances

Is your club a charity?

A club is not automatically a charity. Most members’ clubs, social clubs and sports clubs exist for the benefit of their members and are not charities, even when they do good work in the community. A charity must have exclusively charitable purposes and, in England and Wales, will usually need to register with the Charity Commission once its income passes the registration threshold (a CIO must register whatever its income, and some charities are exempt or excepted). Scotland and Northern Ireland have their own regulators.

A sports club may instead be registered with HMRC as a Community Amateur Sports Club (CASC), which brings some tax reliefs but has its own conditions on membership, income and how the club is run. A CASC is not a charity, and a club cannot be both.

The distinction matters because registered charities have separate reporting rules. Depending on its income, assets and governing document, a registered charity may need its accounts to be independently examined or audited. That is a separate piece of scrutiny that must be arranged with an appropriately independent provider. Bee & Co prepares accounts; we do not provide statutory audits or independent examinations, and ordinary club accounts we prepare are not an independent examination. Our charity accounting guide explains charity reporting in more detail.

Membership subscriptions

Subscriptions are usually a club’s most predictable income, so they are worth recording carefully:

• Keep a membership list showing who has paid, how much and for which period
• Record subscriptions separately from bar, hire and fundraising income
• Where subscriptions are paid in advance for the next season, show them as received in advance at the year-end rather than income of the current year
• Record joining fees, life memberships and concessions consistently
• Reconcile the membership list to the money received at least once a year

Bar and food sales

A bar turns a club into a trading organisation. Takings should be recorded gross from till reports, with card fees recorded as a cost, so the committee can see true sales. Split takings by department where the till allows (drinks, food, snacks) because margins and VAT can differ. Cash spent from the till before banking, and drinks given away or used for events, should always be written down; otherwise sales are understated and stock results look wrong.

Stock and cash controls

Most club financial problems start with weak controls rather than dishonesty, and good controls protect volunteers as much as they protect the club. Practical steps:

• Count and record cash with two people present, and bank it promptly
• Reconcile the till, card settlements and banking every week
• Carry out regular stocktakes and compare actual gross margins with what they should be
• Record wastage, breakages, line cleaning and complimentary drinks
• Require two signatories or two approvers for payments
• Keep receipts and invoices for every payment, and reconcile the bank account monthly

Gaming machines and entertainment income

Where a club has gaming machines, record the gross takings and payouts from each machine collection, along with any share paid to the machine supplier. Machine income can carry its own duty and VAT treatment, so it should be kept separate from bar sales. Entertainment income such as ticketed events, bingo, quizzes and raffles should also be recorded separately, together with the related costs. Gambling permits, lottery rules and licensing are specialist matters, so take appropriate advice on them.

Room, function and facility hire

Hiring out a function room, hall, pitch, court or other facility can be valuable income. Keep a booking record, issue invoices or receipts, and record deposits taken in advance. Hire charges, catering and bar sales at a function may all be treated differently for VAT, so record them as separate lines. Where the club hires out facilities regularly, consider whether the income affects its tax position.

Fundraising and sponsorship

Fundraising events, appeals and donations should be recorded with the event costs alongside, so the committee can see what each activity actually raised. Sponsorship is different from a donation: where a sponsor receives advertising, branding or other benefits in return, it is usually a trading receipt and may have VAT and tax consequences. Keep a copy of every sponsorship agreement and note what the club has promised in return.

Grants and restricted funds where relevant

Grants from councils, sports bodies, lottery distributors and trusts usually come with conditions. Money given for a specific purpose (a new roof, kit, a youth programme) should be tracked separately so the club can show it was spent as intended. Keep the grant letter, record spending against it and note any unspent balance at the year-end. Some funders require a report or repayment of unspent amounts, so check the terms before the money is spent.

Staff, payroll and volunteers

Paid bar staff, stewards, cleaners and coaches are usually employees, so the club needs to run payroll through PAYE, report to HMRC in real time, pay at least the minimum wage, handle holiday pay and assess workplace pension duties. Casual and seasonal staff are not exempt. Genuine volunteers are not paid, but reimbursing their actual out-of-pocket expenses is normally fine; a regular flat payment to a “volunteer” may create an employment relationship, so take care. Our support services include payroll.

VAT

Clubs with a bar often pass the VAT registration threshold through bar sales alone, so turnover should be monitored on a rolling 12-month basis. Some club income may be exempt or outside the scope of VAT, such as certain subscriptions and some sporting services supplied by eligible non-profit bodies, while bar sales, catering and most hire income are usually taxable. Mixed income can restrict how much VAT can be reclaimed on costs. Our VAT guide covers registration, schemes and returns under Making Tax Digital.

Corporation Tax and other filing obligations

Many people assume a members’ club pays no tax. In fact, an unincorporated club or association is usually within the scope of Corporation Tax on income from non-members, trading with the public, investment income and certain gains, even though income from members’ own mutual trading is generally not taxable. A club run as a company must also file accounts with Companies House and a company tax return, and registered charities and CASCs have their own reliefs and conditions. Where a club has taxable income, it must tell HMRC. Our compliance services cover accounts and filings.

Year-end accounts

Year-end accounts let the committee report to members, usually at the annual general meeting, and support any tax return or regulator filing. Depending on size and structure, these may be simple receipts and payments accounts or accruals accounts showing stock, money owed and paid in advance, and fixed assets. Good accounts show bar, subscription, hire and fundraising activity separately, so members can see which parts of the club pay their way. Preparing accounts is not the same as an audit or independent examination; where your rules or a funder require external scrutiny, it must be arranged separately.

Governance and treasurer handovers

Volunteer treasurers change, and a poor handover is one of the most common reasons club records fall apart. When a treasurer steps down, hand over:

• Bank statements, account access and an up-to-date list of signatories
• The latest bank reconciliation and the cash book or digital records
• The membership list and subscription records
• Grant letters, sponsorship agreements and any restricted fund balances
• Payroll, VAT and HMRC login details and filing deadlines
• Leases, licences, insurance, loan and supplier agreements
• The last set of accounts and any notes for the year-end

Change bank signatories promptly, keep records in a shared digital location owned by the club rather than one person, and record significant financial decisions in committee minutes.

How Bee & Co can help

We are a cloud-based practice working with clients across the UK, so records come to us digitally. For clubs, associations and community groups we can:

• Set up simple bookkeeping, takings and banking routines volunteers can follow
• Keep the records up to date and reconcile bank, till and card income
• Run payroll for bar and other staff
• Prepare and file VAT returns from digital records
• Prepare year-end accounts and any tax returns the club needs
• Help a new treasurer pick up the records smoothly

Get in touch and tell us about your club, how it takes money and what your committee looks after itself.

This guide is general information and is not advice for your club or organisation. Tax, VAT and regulatory treatment depends on your structure, rules and facts, and licensing, gambling, charity law and employment matters may need specialist advice, so please check with us before acting.