Unincorporated associations and companies limited by guarantee can also be registered as a charity, the main advantage being that this results in large tax savings.
The main obstacle to becoming a charity for a sports organisation is that to be eligible to register as a charity the organiusation must have a charitable purpose.
There are a variety of charitable purposes defined by the Charities Act 2006. The charitable purpose used frequently by sports organisations to register as a charity is 'the advancement of amateur sport'.
This is losely defined as either providing facilities, promoting education, or community participation by reference to sport. The sports organisation must also exist for the public benefit.
The clear advantage to being registered as a charity is full exemption from tax on profits from membership fees, bank interest and investment income. Gift aid can be claimed on donations from companies as well as donations from individuals.
Registering as a charity can be an arduous process for a sports organisation and the following potential issues need to be considered:
Being a charity is a permanent status. Once the organisation registers as a charity it cannot stop being a charity.
Being for public benefit does mean that whilst there can be competition to represent the national teams, the organisation must allow everyone to become a member and have equal access to facilities – There have been several cases in the past where sports organisations have failed to comply with the public benefit requirements and have been fined by the charity commission (the regulator for charities).
Registering as a charity with the charity commission means that the sports organisation is subject to charity law and requirements regarding trustees (board members) as well as being subject to regulation by the charity commission. This can create a complex environment where a sports organisation is funded by one body and contractually bound to perform in a certain way, whilst legally being bound to the charity commission and legal requirements as a charity.
The definition of the charitable purpose 'the advancement of amateur sport' has been defined as 'the advancement of any sports or games which promote health by involving physical or mental skill or exertion and which are undertaken on an amateur basis'. This differs from other accepted definitions of sport – such as the list of recognised sports by Sport England or the definition of sport offered by the European Commission – which has prevented many sports organisations from registering as a charity because although recognised as a sport in other ways, the charity commission has not viewed them as fulfilling this requirement.
The charity commission recognised the potential problem and in early 2011 launched a consultation on what 'the advancement of amateur sport' should mean.
You can download the consultation launched by the charity commission below and you can also view the response prepared by the Sport and Recreation Alliance.
We will update this page as soon as the charity commission take a decision on this definition.
Links:  http://www.sportandrecreation.org.uk/sites/sportandrecreation.org.uk/files/Articles of Association for a Charitable Company.pdf
 http://www.sportandrecreation.org.uk/sites/sportandrecreation.org.uk/files/Charitable Associations Model Constitution.pdf
 http://www.sportandrecreation.org.uk/sites/sportandrecreation.org.uk/files/Charity Commission Consultation on Advancement of Amateur Sport.pdf
 http://www.sportandrecreation.org.uk/sites/sportandrecreation.org.uk/files/Response to the Charity Commission Consultation on the Advancement of Amateur Sport.pdf
 http://www.sportandrecreation.org.uk/sites/sportandrecreation.org.uk/files/Trustee Interview Assessment Form - Sport England.doc
 http://www.sportandrecreation.org.uk/sites/sportandrecreation.org.uk/files/Bates Wells & Braithwaite - Guidance on Charity V CASC.pdf