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Finance Bill

My Lords, if we are follow the Prime Minister’s lead in tackling obesity, we must think beyond the input of unhealthy food to output policies to address a generation of young people who are less fit now than when the Government initiated the national Fight for Fitness campaign in 1900, during the Boer War. We have a generation of young people heading into the summer holidays who are some 60% less fit than they would normally be. Mental health issues are on the increase and boredom and obesity are commonplace. We need to consider a national campaign for sport, recreation and fitness, with sports clubs, home fitness campaigns and new levels of access to facilities at an affordable cost at its epicentre.

Community sports clubs deserve to be at the centre of this plan and not, regrettably, to be penalised by the Finance Bill. Due to the way in which tax law applies to not-for-profit clubs, Schedule 16 to the Bill will impose CT liabilities and potentially significant additional costs and reporting burdens on community sports clubs in relation to Covid-19 support grants. In practice, clubs are likely to have to pay corporation tax on their grant income, thus reducing the funds available for investment in grass-roots sport at a time when finances are critical and the need to engage with a growingly unfit population is all the more important. It appears counterproductive for the Government to continue to claw back a proportion of these grants in tax when there is now a vital need to support the sectors that have been hit the hardest by the pandemic and resulting lockdown.

In addition, many clubs will have to file corporation tax returns for the first time, with many having to use costly professional help to do so. Little tax is likely to be collected, but significant administrative burdens will be imposed on both community sports clubs and HMRC. I would be grateful if my noble friend the Minister and his colleagues would consider the proposal for a coronavirus support payment received by a not-for-profit sports body to be exempt from tax under paragraphs (1) and (6). For this purpose, a not-for-profit sports body is one that qualifies as an eligible body in group 10 in Schedule 9 to the Value Added Tax Act 1994. I hope that the Government would agree.

I appreciate the constraints that this House is under when it comes to money Bills, but I very much hope that the Minister will give serious consideration to the consequences of this additional burden on the sport, recreation and fitness sector, as it is this sector that, alongside health, will unlock the potential of this country to recover through an absolutely essential improvement in the population’s fitness so that we can minimise further cases of coronavirus this winter.

2.38 pm