Social club assets

A question about : Social club assets

I am the treasurer of a small works social club. All our members are being relocated to various parts of the company although the site is going to remain with a few new personnel brought in. We have a few physical assets that we intend to leave to the new people so we aren't exactly closing down our social club just passing it on.

We have a largish sum of Ј5000 built up over many years from social gatherings and a membership of 25. We are proposing to have an EGM and distribute this money between the 25 members evenly I suppose as a gift.

Our employers are unhappy with this.

Is there any foreseeable issues or tax implications with this?

Thank you.

Best answers:

• How is the social club set up for tax purposes - is it a charity?
• No. Our income is from a very small works bar and tuck shop and subscriptions. Our outgoings are to maintain a TV and gym equipment at work.
  We used to have socials up until about 5 years ago frequented by both members and non members and that is how we built up the cash asset but have ran at break even for last 5 years.
• I'm not sure you can just 'give' people the money to be honest. As has been said, it's going to be depend on the legals of the club and how it was formed etc. For the sake of that much money it might be worth getting some legal advice? Do you know a friendly accountant/legal person that could take a look over things for you?
  df
• We have always gifted Ј50 for weddings, retirements or births to members so I had assumed gifting Ј200 would not be an issue but our employers are unhappy with us distributing the monies and suggested gifts should be taxable.
  I am racking my brains to think of a contact with accounting knowledge.
• Might it be simpler if you closed the club, donated the physical assets to a new club, and distributed the money to the old club members?
  There will be clauses in the club's constitution detailing what happens if the club is wound up - you just have to make sure you comply with them.
• Unsuprisingly our employers rewrote the guidance document for social clubs six months ago stipulating that assets of a folded club must be donated to charity as they have a large social club and our workplace was merely a subgroup of that social club